Adviser calls out estate agents over gazumping

The adviser, who wishes to remain anonymous, complained the estate agents had sold a house after it had accepted their the adviser's offer for it.

However, a spokesperson for the estate agent has argued against this complaint as “it would be unethical to go against the instructions of our client, as required under the Estate Agent Act”.

The case

The adviser explained that, on April 24, they made an offer on a property with Strutt and Parker in Ascot and, after some negotiation, they managed to offer the full asking price which was accepted.

The next day, the estate agents issued the adviser with a memorandum of sale and, after receiving this, they went ahead with the structural survey.

“On the 28th I told the estate agents I was going to India on holiday for a month but I was hoping that everything would happen smoothly even while I was away. I forwarded my mortgage broker details, my solicitor details, everything was done before I left for India.”

However, on the May 2, the adviser received a phone call from the estate agent’s negotiator, informing them that the seller had decided to sell the property to someone else.

The adviser described this information as a “complete shock to me”.

“The property was off the market, on my request they had to take it off the market which was sold as subject to contract,” they explained.

“It was not on the market and their excuse was they had another viewing in the diary so the seller decided to go ahead with it and someone exceeded the original asking price.”

However, the estate agents said this was a party who had previously been introduced to the property and so meant they were acting on their client’s instruction.

Consequently, Strutt and Parker made the adviser aware that, if they wished to counter this new offer, it would need to be “beyond £1.2mn”.

Impact

The adviser said this case has made them “extremely annoyed”, arguing the estate agents should not be doing other viewings when the house has already been sold.

“They’re putting all of the blame on the seller, saying that the seller wanted to go ahead with it, but I think they are guided by the estate agents,” they said.

“They accepted my offer at the asking price, straight away issued me with a memorandum of sale, at no point did they tell me there was another appointment for someone else in the diary.”

While the adviser stated they were “not worried” about the cost that had been incurred, they did say that the whole situation had caused them some emotional distress.

“When people make an offer on a property a lot of emotions go with it and after being so excited that I’d got my perfect house this is what they’ve done to me,” they explained.

“I’m furious, I’m extremely disappointed, and I’ve lost the ability to look for another property, I’m just so depressed.”

Response

In response, a spokesperson from Strutt and Parker stated: “We understand it is frustrating and upsetting when a seller accepts an offer but the purchase does not go on to complete.

“The law on buying and selling in England and Wales means estate agents have a legal obligation to put all offers forward to a seller.

“In this instance, a significantly higher offer over the guide price was submitted from a party who had previously been introduced to the property and, due to the significant increase, our client instructed us to accept the higher offer.”

The spokesperson added this case reflects the current buying system in England and Wales under which gazumping is not uncommon.

“Until a property has exchanged contracts either party can change their minds on whether they wish to buy or sell right up to exchange of contracts,” they explained.

“We certainly do not advocate this, and it is not something we enjoy having to deal with, but it is a product of our current buying and selling process.”

tom.dunstan@ft.com

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