Is ghost gazumping against the law?
Whilst the recovery in the housing market is good news it has sadly prompted a return of the phenomenon of gazumping – where a seller accepts an offer on their property only to later renege on the deal and accept a higher offer from another purchaser. However, there’s now a new twist to this – ‘ghost gazumping’ where sellers renegotiate after accepting an offer claiming they’ve had a higher bid when in fact there is no rival bidder.
‘This is a most unwelcome development,’ explained Eddie Goldsmith, Senior Partner at property solicitors Goldsmith Williams ‘and whilst the prospective buyer might feel that there should be a legal recourse in these circumstances the sad fact is that only when exchange of contracts takes place do the terms of the property deal become legally binding.
However there are some measures that brokers can advise buyers take to seek to protect themselves from gazumping or ghost gazumping. For example once an offer is accepted the buyer can ask that the property is taken off the market or even request to enter into an agreement with the seller where the seller agrees to honour the buyers offer and the agreed price, although such agreements are uncommon. Purchasers could take out insurance cover to protect them if the deal falls through though this does come at a price.
Another tactic is to put pressure on all parties involved in the conveyancing to speed up the house purchase process thereby minimising the seller’s inclination to risk the transaction. Brokers can give their clients a real boost here by recommending conveyancers who hold the Law Society’s Conveyancing Quality Scheme accreditation as such firms are more likely to be on the lender’s panel and most likely to operate a streamlined and efficient conveyancing process.
That coupled with a firm that has online case access for clients and brokers alike helps keep the channels of communication between all parties open and enables the buyer to keep their seller on top of progress building trust between these two parties.
Whilst gazumping and ghost gazumping aren’t against the law – lawyers can do much to help brokers in turn help their client buyers avoid becoming victims of this worrying trend.’
Content correct at time of publication