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Expert strata, facilities & building management services

Gazumped!

By bob12and25 - 27 August 2012 16

Just happened to me.  Made an offer on a property that had been on the market for a while and not selling, negotiated over several days, upped the offer, and the seller accepted it.  Seller’s solicitor sent mine the contract and before we could sign it – just a few days including a weekend – the seller accepted a higher offer.

The way I think about it, rarely does someone tell you the value he puts on his reputation.  The amount a seller takes in a higher bid over one he has already accepted does just that.    In this case, not really very much.  I guess he’s in a position to know what his reputation is worth.

What’s Your opinion?


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16 Responses to
Gazumped!
troll-sniffer 3:13 pm 28 Aug 12

Comic_and_Gamer_Nerd said :

Bluenomi said :

Why is it the agent’s fault? Blame the seller, they accepted the higher offer, it’s the agents duty to pass on all offers to them.

It’s leagl and the reason why you never assume you’ve got the house until the contract is signed.

i think we can all agree that real estate agenhts are scum of the land, right up there with criminal defense lawyers and parking inspectors.

Ummm… the first two blood sucking bottom dwelling species I can agree with but I take offence at naming parking inspectors as scum. Without them, those of us who can and do park legally and sensibly wouldn’t be able to. So, I rate parking inspectors close to god in stature, unless of course they are the lowlife scumsucking whore’s progeny who used to book me before I started to read parking signs and my watch.

schmeah 3:05 pm 28 Aug 12

Until contracts are signed anyone can jump in.

That said, some agents turn late comers away. This happened with a house I recently purchased; offered the seller a rate around 15K less than the asking price .. waited the standard time to exchange and after all was done and we were moving in, the agent told me that someone who she/he called a ‘time-waster’, was on her case about offering a higher price. The agent basically told me the newcomer wasn’t worth their salt, full of wind and would cause more trouble for the seller than was worth so told them to jump.

I think it depends on the seller and how quickly they want to sell and the agent – how ethical they are and how much they can be bothered dealing with multiple parties all trying to scrap the barrell the best they can. Other agents I’ve dealt with are vultures, they’ll nail you to a corner, trying everthing to get you to agree and sign while trying to influence others to jump in.

Comic_and_Gamer_Nerd 12:50 pm 28 Aug 12

Bluenomi said :

Why is it the agent’s fault? Blame the seller, they accepted the higher offer, it’s the agents duty to pass on all offers to them.

It’s leagl and the reason why you never assume you’ve got the house until the contract is signed.

i think we can all agree that real estate agenhts are scum of the land, right up there with criminal defense lawyers and parking inspectors.

breda 11:45 am 28 Aug 12

Bad luck, but there is no contract until you have signed on the dotted line. If you were selling, and someone offered you a higher price when you had no guarantee of a sale, would you refuse?

One advantage of auctions is that you cannot be gazumped. Other than that, until the vendor has a signed contract in their hand, the property is still on the market. People promise that they want to buy, but don’t follow through for whatever reason. Quite simply, if you want to buy, turn up with a deposit and sign a contract asap.

That’s the way it goes.

Affirmative Action M 11:32 am 28 Aug 12

You’ve got to appreciate that there are also cases of buyers making offers then withdrawing for no reason before the deposit is paid so it works both ways.

Bluenomi 11:30 am 28 Aug 12

Why is it the agent’s fault? Blame the seller, they accepted the higher offer, it’s the agents duty to pass on all offers to them.

It’s leagl and the reason why you never assume you’ve got the house until the contract is signed.

Rawhide Kid Part3 10:40 am 28 Aug 12

Greed! Greed! Greed! Pure and simple. Oh and another way to push those pesky house prices up again.

NoAddedMSG 10:36 am 28 Aug 12

That happened to us late last year. We went down to the solicitor to sign contracts, and it turned out the seller had signed with someone else the day before. It ended up costing us $300 in legal fees for the failed sale.

I wrote, but never quite got around to sending a letter to the Real Estate Institute of the ACT asking them to investigate the agent because based on the calls our solicitor made to their solicitor, I think the agent (who was a young bloke) told us bare-faced lies about his role in the process, i.e. he was involved but suggested the seller had attempted to break the contract with the agent and gone behind his back. Not true according to the solicitor.

I really regret not sending the letter now… the REIACT have a code of conduct, and I felt the agent breached the following clauses:

Fair Conduct
2.7 A member must act fairly and honestly and to the best of his or her knowledge and ability with all parties in a transaction.
2.7.1 A member must not mislead or deceive any parties in negotiations or a transaction.

Gazumping may be legal, but it certainly is not ethical – we did everything we should have – we kept in contact, acted quickly, and were ready to sign well before the required date – and it still ended up costing us $300 with nothing to show for it. For the rest of the house-hunting process, we automatically ruled out any house which was listed with that agency.

Mysteryman 9:51 am 28 Aug 12

Comic_and_Gamer_Nerd said :

ahhh, i was told wrong information then.

Well there’s a surprise.

Sucks that the OP got beaten, but until there is a contract, the property is fair game.

Comic_and_Gamer_Nerd 8:43 am 28 Aug 12

Primal said :

Comic_and_Gamer_Nerd said :

As I understand, illegal in everywhere bar Canberra.

Still legal in at least NSW, Vic and Qld (according to http://www.apimagazine.com.au/blog/2012/03/gazumping-%E2%80%93-why-do-agents-do-it/ )

ahhh, i was told wrong information then.

In anycase, its a completely scumbag thing to do and agents that do it need to be named and shamed.

milkman 7:19 am 28 Aug 12

Interesting. This sort of thing normally happens in a rising market, but I would have thought we still have some more stagnating to get through first.

gasman 6:17 am 28 Aug 12

Immoral? Possibly. Unethical? Definately. Illegal? No, not anywhere in Australia.

The deal is only done when the contracts are signed and exchanged by both parties. Until that point there is nothing to prove that any agreement has been made.

If you don’t want to get gazumped make sure you have everything ready to go (inspections, legals, finance, etc) at the time you make the verbal offer, and sign on the dotted as quickly as possible.

Primal 12:53 am 28 Aug 12

Comic_and_Gamer_Nerd said :

As I understand, illegal in everywhere bar Canberra.

Still legal in at least NSW, Vic and Qld (according to http://www.apimagazine.com.au/blog/2012/03/gazumping-%E2%80%93-why-do-agents-do-it/ )

Comic_and_Gamer_Nerd 8:52 pm 27 Aug 12

As I understand, illegal in everywhere bar Canberra.
Gazumping is looked down on by every decent human being.
Name and shame the real estate agent. Only way to help make them ever do it again.

ThatGuy 8:42 pm 27 Aug 12

Could be wrong, but I thought until contracts are exchanged and signed then you can still be outbid.

Generally, once the solicitors start rolling, agents will tell the vendor to give the big FO to any new offers to avoid the serial stuff-arounders and any delay in them getting their fees. Taking a late higher offer might seem attractive but it could easily fall through and both offers go up in smoke. Far better off sticking with the buyer who’s clearly committed.

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