What is a property agreement?

 

One of the most frustrating elements of buying a property is that the sale is not formally agreed until the contracts have been exchanged.

Despite the fact that before this stage a great deal of work will have been undertaken, often at considerable expense to the parties, the sale may fall through.

Gazumping and gazundering

These are the most common reasons for a sale being unsuccessful. Gazumping is when the seller suddenly ups the price on the property, possibly due to a better offer. Gazundering is when the buyer demands a price drop at the last minute.

Which is more likely will depend upon the conditions of the market.

The reason this is possible is that the law requires that property transactions take place in writing and fulfilling certain formalities. This is supposed to protect both sides from the uncertainties of oral contracts.

However, it means that, in the case of being gazumped or gazundered, there is no legal remedy and in fact many property advice companies advise buyers and sellers to take advantage of this.

Done correctly, profits of many tens of thousands of pounds may be achieved.

Learn more about the technical aspects of agreements by visiting our contract law pages.

Protecting yourself

There is no hard and fast way to protect yourself from being gazumped or gazundered, but there are steps you can take to improve your position.

The most important step is to secure a good solicitor. The faster you can complete the legal formalities on your side, the less chance the other side has to change the deal.

Some solicitors even offer ‘no sale, no fee’ arrangements for simple conveyancing work, but you should always check that there are no special requirements that may require more advanced expertise.

It is also important to keep up communication with the other party. If you are buying, ask them not to arrange any more showings and to list the property as sold. If you are selling, ask them not to keep looking elsewhere.

Although there is nothing you can do if the other side does not act in good faith, people are more likely to be honest if they know the other side is not trying to deceive them.

You can learn more about buying and selling property by visiting our conveyancing pages.

If you are buying or selling a property, Contact Law can put you in touch with a local specialist conveyancing solicitor free of charge. Please call us on 0800 1777 162 or complete the web-form above to speak to one of our advisors.

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