#gazumping

Le gouvernement britannique a dévoilé un ensemble de réformes ambitieuses visant à transformer en profondeur le système d’achat et de vente de biens immobiliers en Angleterre et au Pays de Galles. Parmi les mesures phares, l’introduction d’offres d’achat juridiquement contraignantes dès les premières étapes du processus, mettant fin à une pratique décriée : le « gazumping », où un acheteur se…

With the property market heating up, gazumping is becoming all too common as demand outstrips supply.

How To Fix Broken House Sale Chains

Property chains are common in the UK. If the successful completion of a house sale is reliant on the sale of at least one other property, the individuals involved are in a property chain.

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https://www.vionafrica.cf/uk-government-could-ban-gazumping-to-tackle-stressful-house-buying/

UK government could ban gazumping to tackle stressful house-buying

UK government will consider cracking down on gazumping in order to streamline the process of buying houses.

Gazumping is when a seller accepts a higher offer after they've already agreed to a sale.

A government survey revealed that 69% of sellers and 62% of buyers felt stress and worry as a result of delays.

Do you ever get that gazumping feeling? Maybe you're a gazunderer?

Well, you might not be for much longer. The UK government has announced plans to crackdown on gazumping — when a seller accepts a higher offer from a new buyer after already agreeing to a sale.

Communities Secretary Sajid Javid has announced an eight-week review of the property buying process.

Javid said: "We want to help everyone have a good quality home they can afford, and improving the process of buying and selling is part of delivering that.

"Buying a home is one of life's largest investments, so if it goes wrong it can be costly. That's why we're determined to take action to make the process cheaper, faster and less stressful.

"This can help save people money and time so they can focus on what matters – finding their dream home. I want to hear from the industry on what more we can do to tackle this issue."

The government also released a survey of 2,000 recent home buyers, which revealed that 69% of sellers and 62% of buyers felt stress and worry as a result of delays.

The report also showed nearly half (46%) of sellers were concerned about buyers changing their minds after putting an offer down and almost a quarter (24%) would use a different estate agent if they had to do it all again.

Almost a third (32%) of sellers and 28% of buyers were unhappy with the other party's solicitor, the Department for Communities and Local Government said.

The plans for a review, though, came under fire from Shadow housing secretary John Healey:"This is a government out of touch and out of ideas," he said. "After seven years of failure, ministers still have no plan to fix the housing crisis."

Alex Neill of Which? magazine, called the house-buying process "outdated and flawed".

"Buying a home can be one of the most stressful experiences in life, with sales often taking too long or falling through, with some consumers losing substantial sums of money.

"The government must put consumers first, ensuring that estate agents deliver a better service for both home-buyers and sellers and that the conveyancing process is simplified."

The call for evidence will run for eight weeks from Sunday.

Join the conversation about this story »

Many of you will be asking yourself..... What is Gazumping? This is a strange word and used to describe a very specific practice in the UK Real Estate industry.

           This ‘frowned upon’ exercise arises from how the offer process is conducted. If you are unsure of the differences in offering in California and the U.K., I have written an earlier post entitled – ‘Offers’ that explains. 

As an offer is not legally binding when submitted in the U.K., there are far more deals that do not get to exchange of Funds and Keys. In fact due to this and other reasons the ‘fall- through rate’ in London for example, is around 1/3rd of all residential deals.

Gazumping is when a Seller has accepted an offer for a property, begins the conveyancing process which incurs costs to both sides such as – appointing a Property Lawyer, booking inspections, paying a mortgage arrangement fee. 

Once this process is under way it is an assumption on both sides that they have mad a commitment to each other and that they have made an agreement on price and timeframes for the sale that they will both try and honor to the best of their ability.

Of course this is not always the case…… what happens is a new offer is submitted from a buyer that either saw the property before it went ‘under offer’ or the seller has continued to show the property to new buyers, despite having agreed an offer. 

When this happens, it is the agent’s duty to inform the seller of the new offer. If this offer is higher in price or has better terms than the currently agreed offer the seller has no recourse in switching to these, more favorable, terms. Of course many sellers appreciate that they have already agreed to sell their property and will not consider switching out of principal.

Obviously, many people feel no allegiance to a specific buyer and money talks. This leads to a common sight in the U.K property market where a buyer, who thought they had found their next home, spends 2-3 months attempting to buy it, while incurring costs, and can wake up the next morning to be told they are no longer buying the home and have lost money.

The frequency of this happening often depends on the state of the market. If prices are decreasing, this is very unlikely to happen as buyers will not offer more than a previous buyers agreed price. In a strong market Gazumping can be rife!! For example in 2013 prices rose an average of 25% across London in the year. This meant that any property put ‘under offer’ in February would be worth nearly 10% more by the time the conveyancing process is finishing, many sellers in this market saw their neighbors listing an identical property (common in Victorian London) for much more money then they were about to receive.

Of course this can lead to Gazumping, secretly showing the property, or possibly even requesting more money the day before they sell the home. All nightmares for any buyer, especially 3 months into a transaction! I also believe that this is one of the main contributing factors to the common saying in the U.K. – ‘The two most stressful events in life, are getting divorced and buying a home’.

I hope this explanation has helped you understand the meaning of the term Gazumping. If you have any questions don’t hesitate to contact us at –

[email protected]

“Gazumping” Declines Across UK Residential Market #property #investment

The practise of “Gazumping,” Simon Morris recently learned, declined significantly across the UK residential property market in the past ten months. Demand and supply  The UK housing market is currently characterised by a demand/supply ratio tilted in favour of demand.  Data from the Office for National Statistics’ June 2015 House Price Index shows that that the average UK house price increased…