The Government is investigating introducing a ban on gazumping, a practice which causes an estimated 200,000 house sales to fall through every year.
Gazumping happens when someone selling a property verbally accepts an offer from a purchaser but subsequently accepts a higher offer from a third party. A property sale in England is not legally binding until contracts for the sale and purchase have been exchanged. Before this happens a prospective purchaser will need to have local authority searches carried out, had a survey of the property, organised a mortgage if required and will also have incurred legal fees.
The entire process can take as long as 10 to 12 weeks. If the seller receives a higher offer within that period he is legally able to accept it, which can result in the first purchaser being substantially out of pocket.
The Telegraph has reported that representatives of the Department of Business Innovation and Skills (BIS) met recently with members of the National Association of Estate Agents (NAEA) to discuss the possibilities of banning gazumping. The BIS suggested bringing the legal process in line with that of Scotland where house sales are made legally binding much earlier in the process.
Further discussions are planned.
If you are thinking of buying or selling in the Gloucester area, contact long-established local estate agents Farr & Farr on 01452 500025 or explore our website farrandfarr.co.uk
