More Certainty for Home Buyers and Sellers: Proposals to Ban Gazumping and Gazundering
Gazumping: where sellers accept a higher offer, having already accepted another buyer’s offer.
Gazundering: where homebuyers threaten not to complete a sale unless money is knocked off the price at the last minute.
Currently, buyers and sellers alike can do nothing to stop either Gazumping or Gazundering hindering a property sale, which causes uncertainty and leads to wasted costs on both sides of the transaction.
Paula Higgins, chief executive of the Homeowners Alliance said:
“Gazundering, gazumping, collapsing chains, and one in three sales falling through. It takes too long, is too uncertain, too open to abuse by unscrupulous operators, and too often homebuyers can end up paying huge costs without having even bought somewhere to live.”
The proposals to ban these practices are an attempt by the government to make buying and selling houses cheaper, faster and less stressful, by mirroring practices in other countries in Europe. Homebuyers and sellers as close as Scotland have much more certainty, with offers constituting a binding contract for the sale and purchase of the property. The proposals would bring England and Wales in line with this, and such a system would mean that neither party could withdraw without being liable for the losses of the other party to the transaction.
Communities Secretary Sajid Javid has requested evidence from estate agents, solicitors and lenders about how the process could be made more stress free for both parties. This evidence gathering will run over the next 8 weeks, before decisions are made as to how to update the property purchase process.