The government should take a close look at gazundering as well as gazumping in its review of the house sales process, says a major regional agency.
Last weekend the government announced that it was investigating the buying market in England and Wales, with a ‘call for evidence’ from mortgage lenders, solicitors and estate agents about the current system.
Gazumping was highlighted by Communities Secretary Sajid Javid as a particular issue he wanted to resolve but Chris Priestley, head of residential sales at Loveitts agency in Coventry and Warwickshire, says gazundering should be on the agenda too.
“Just looking at gazumping is not enough. There also has to be protection for sellers from the opposite problem – gazundering - where buyers drop their offer price close to an exchange of contract, leaving the seller in a position where they either have to bite the bullet and accept the lower price, or remarket the property” says Priestley.
“It would be nice to see a system that works for both buyers and sellers, tying both parties into an agreement when an offer is agreed and accepted. Such a system may require that a survey has to be done before a property goes on the market” he adds.
Priestley says this would help establish a true asking price based on the condition of the property and would also give the buyer more knowledge of the property so they can make a more educated decision.
“The way in which we buy and sell homes in England and Wales is antiquated and needs to be brought up to date. We could certainly take some lessons from Scotland where the process is more transparent and fairer on both parties.”
Priestley says gazumping is rare in Scotland because many properties are sold under a ‘sealed bid’ system where buyers submit their offers in a sealed envelope and all bids are opened after a set closing date, with the seller deciding which offer to pick.
Properties in Scotland are generally removed from the market once contract negotiations are underway.