Could the heartache of gazumping finally be about to end?
Imagine the scenario, you have found the home of your dreams, and in your mind’s eye, you have the colour scheme mapped out, you start shopping for furniture and you’re on cloud 9.
Then out of the blue, you get a phone call to say the sale is off as the seller has found someone else prepared to offer more.
Its gut wrenching, and all too common. An estimated third of all property sales fall through, resulting in hundreds of millions of pounds a year being wasted and putting people through the emotional cement mixer.
Whenever we at Keelys talk about house buying as experts in conveyancing in Lichfield and surrounding areas, we generally find ourselves telling our readers that buying property is one of the most stressful situations a person can find themselves in. We also say how it is the biggest financial commitment that most people are likely to undertake, hence the reason for ensuring it is legally sound.
However, now is a good time to focus on gazumping, where a previously accepted offer is rejected due to someone offering more money.
We won’t get involved in the ethics of this, but like many who work in the property market, we have found it frustrating that buyers are left so vulnerable to such happenings.
However, there has been talk in the national press of a new scheme that would require a homebuyer or seller who pulls out of a transaction, without a strong reason, to pay compensation and it may be trialled by the government in the next few months.
The new type of agreement, announced before the election was called, would lock people legally into the process earlier and make it tougher to move the goalposts because of a change of heart or accepting a higher offer.
The proposed agreement would involve one or both parties putting down cash at the outset.
Called a reservation agreement the government has been mulling it over for a while, but is now moving closer to it becoming a reality.
Currently, this type of agreement is used by a small number of estate agents, whilst those buying new builds are often asked to put down a reservation fee.
We do not as yet know what acceptable reasons for pulling out are, but we can only guess at perhaps a job loss or bereavement seem to be reasonable excuses.
However, as yet the information on this initiative is still quite sketchy.
Following government research a trial could happen as early as the first quarter of next year, but of course, much depends on what happens in the General Election, as it is a Conservative initiative.
It does seem, however, to be a sensible step forward, which can only help give peace of mind at a stressful time.
We shall look at the developments closely.
If you wish to talk to us about property transactions, please contact our residential conveyancing team today for an informal chat.