Gazumped

[023mjc]

Evening all - any one got a little advice to offer. I have only ever bought a council house before, and was already living in it, so I have no real experience of buying property.

Recently I was trying to buy a little studio flat for my son to live in. A studio was all I could afford with the funds I have available and there is very little in my price range but, found one I liked - a repossession, had my offer accepted, engaged a solicitor and everything was going ahead nicely. Then, 2 days before exchange the vendor accepted a higher offer from a property developer.

All I got was a solicitors bill for £855. So now I have even less money, therefore even less chance of finding one I can afford.  If I should happen to find another (I'm not in a hurry so I can afford to wait and see) is there anything I can do to protect myself from this happening again.

I'm gutted, because I've never had any money and this was an inheritance from my Mum.Obviously I can't afford for it to happen again. Any one out there with some good advice ? I'd be most grateful.

[cee-dee]

There's only one way that I know of for securing a property and that is.....

Having a "regular" solicitor who knows your finances is a start but once you've ensured that the property you want IS what you want and you're aware of any faults, that you've checked that it's not about to be compulsory purchased/demolished/under a closing order/subsiding........ you can go to see your solicitor, have a chat, decide that you want to proceed and get your solicitor to call the vendors solicitor, have another chat and ask your solicitor to ask the other solicitor to consider an exchange contracts over the phone.

It's pretty rare for a sale/purchase to fall through once contracts are exchanged...

Of course, this form of "reverse gazumping" can really cheese off some other prospective purchasers but hey.... business is business and YES I have done it!!

It's great when a plan comes together. B-)

[geographically*challenged]

Taken from Money Saving Exerts -

It's called Gazumping, and is a sad reflection of the poor ineffective laws used in England and Wales and greedy property market. Try the reverse called Gazundering http://www.firsthomebuyer.co.uk/th-m...e=gazunder.xml in future and get your own back, they won't li...

[023mjc]

cee-dee, Thanks. That sounds well worth a try. I know contracts are binding,and I was only 2 days away. Had it been sooner my solicitor would have done less work and her bill would have been smaller. I did explain to her how inexperienced I am and she explained everything pretty well. I guess I was just niaive. Expensive lesson learned.

sunzrus, Thanks for your reply. The link you sent me didn't work so could you explain gazundering. After this, I would have no problem "doing it to them before they can do it to me".

[upthecreekyetagain]

Insurance against additional house buyer's expenses in case of gazumping, (and other risks),  has been available for some years now.

[023mjc]

Thanks creeky, I didn't know that. My solicitor should have told me.

[captainbovine]

it happened to us twice in our house buying years. It cost us a lot of money tooX-(

You could always ask that they take the property off the market when you put in your offer and it's accepted, but that doesn't always ensure that it won't happen again.

insurance against it sounds a good idea though. Good luck for the next try for purchasing a flat. House buying and selling is a minefield.

[lhasa.two]

So, it's a repossession property. That generally means the mortgage lender has appointed an agent to sell on their behalf. Why did the agent not contact you to let you know the vendor had received a higher offer and given you a chance to up your own offer? Secondly, how long had it taken the solicitor to reach two days prior to "exchange" of contracts? I ask because you are a "cash" buyer and could have "exchanged" and "completed" within a week or so with no difficulties for the solicitor. Your solicitor's costs sound high for a low value property so I would ask for a breakdown of those costs before paying the invoice. When you next use a solicitor, ask them to quote upfront.  Neither party are under any contractual obligation prior to "exchange" of contracts so I'm afraid this happens sometimes and it is annoying. 

Advice for the future is to use a solicitor who is experienced in conveyancing. If they know you're a cash buyer they need to move quickly. It's also not necessary to meet the solicitor prior to signing contracts and even then it's not necessary as it all adds to the costs (£150-200per hour) on a tight budget. Local  estate agents will tell you who the good solicitors are because they are dealing with them all the time.

In my book both guzumping and guzundering are not "business is business", it's just unprofessional and tacky but then I'm "old school". 

Good luck, I'm sure you'll find another property soon.

[mr-expresso]

I would echo Ihasa's comments about the fees...£855 is VERY expensive... I would have thought you would have been charged about £500 (max)... especially  as they didn't have to do any post completion work.

I would definitely ask for a break down...

Then ring a couple of solicitors in the area and pretend you want to buy a studio flat and get some quotes... then say one of them quotes you £500ish.. ring your original solicitor and ask them if they can do a conveyence for £500... ( Or get a friend to do it if you think they will recognise your voice)

WHEN they say yes they can then ask then for a reduction to the original invoice...

[mr-expresso]

BTW...

I would certainly have the tactics of the agent looked into....I would bet money that they have had a brown envelope passed over the desk by this property developer...

[**caution**opinion_ahead]

I would agree the costs look very high, and I would query these.  You could see if they would give you a discount if you use them again when you find another property.

Gazundering means you offer a price that is accepted and then, just before exchange you lower the offer.  If the seller is desperate to complete, they may accept the drop.  (They may not though, and you could lose the property.) 

[023mjc]

Thanks every one for your advice and comments. I've taken it all on board and hopefully, if there is a next time I won't make the same mistakes.