A house sale gone bad can be disheartening to any seller and may have far-reaching implications for the seller especially where the sale was for purposes of avoiding home repossession.
Given the economic climate we are faced with, the seller may be faced with uncertainty of not knowing when the property will sell, if at all. However there are things a seller can do when faced with a house sale that gone sour.
Gazumping is when a seller refuses usually at the last minute to authorise his or her conveyancing solicitor to finalise the sale and exchange contracts. There are many reasons why this may happen.
In most cases the seller may have received a higher offer on the property from another prospective buyer and is seriously considering selling to the prospective buyer. If the sale was due an impending home repossession and the seller wants to sell to avoid repossession, any positive change to the seller?s financial situation can lead to gazumping.
Gazundering on the other hand is when the buyer refuses to exchange contracts of sale with the seller or his agent and is also usually at the last minute. Reasons for this may vary, and may include the fact that the buyer is of opinion that the seller is too desperate and may accept a reduced price offer for the property.
Gazumping and gazundering has negative financial implications for one of the parties to the sale agreement and can also create havoc in the chain of transactions linked to the purchase or sale of that property.
What you should do if the buyer withdraws at the last minute?
When a buyer or a seller changes his or her mind at the last minute through gazundering or gazumping, there is not much that one can legally do as one cannot effectively force a sale. All sales are not legally binding unless they are reduced to and proved in writing in the form of contracts exchanged.
One way to combat gazundering is through lock out agreements by the seller. Also, a specific period can be set for exchanging contracts and during this time the seller will not be allowed to sell to someone else. This will combat against gazumping. When the buyer withdraws at the last minute, a seller can consider an auction sale of his property for a quick sale.
The best advice is to speak to a solicitor for legal advice and guidance especially on what to do when the chain breaks and more proactively on how one can be protected against gazumping and gazundering. When the chain breaks, this may lead to financial and possibly legal negative implications for the buyer and also for the seller.