Gazumping is when someone makes a higher offer on a house, after an offer has already been accepted. Resulting in the acquisition of the property.
Recently, the Telegraph has reported that this issue has been debated by the Department for Business Innovation and Skills and the National Association of Estate Agents (NAEA).
Currently, in England and Wales, gazumping can happen at any point in the purchase of a property, up to exchange of contracts. However, the talks with the NAEA, were to determine whether a system similar to that used in Scotland and mainland Europe should be introduced. In such systems, an accepted offer acts as a binding contract.
If this system were to be implemented, it would therefore eliminate gazumping. In the March 2016 Budget, the Government said “We will publish a call for evidence on how to make the process better value for money and more consumer friendly.” Yet, this system may prove unpopular with sellers as they will then have to cover the costs usually covered by the buyer, such as surveys.
Managing Director, Mark Hayward, of the NAEA said “the English system for buying and selling property dates back to the 1920s and has not been updated for nearly 100 years. It is an archaic system which doesn’t allow for modern technology. It needs updating to allow for as much work to be done before the point of offer as possible.”