Recent research has suggested that "gazumping" on sale agreed homes is up by around 7% in two years*. Gazumping is where a higher offer is made and accepted by a vendor after a property has been sale agreed to another party. It is more common in a rising market, and particularly in sought after locations and/or where the supply of homes for sale is low. The practice is completely legal in Northern Ireland, as it is in England and Wales, however Scotland operates a different system which makes offers binding and gazumping is not permitted. 

The problem is that if you are buying a home in NI, a sale agreement is not legally binding until contracts are signed and exchanged. In between times, a host of issues can lead to a buyer pulling out, such as survey or legal matters, or simply the buyer changing their mind.

Here at Key One Property however we reduce the possibility of both sales falling through or gazumping as we operate sale reservation agreements. Similar to that fund with new homes, the buyer and vendor enter into an agreement whereby if one party withdraws from the sale without good reason, they must compensate the other. The agreement also has stipulations about dealing with survey and legal issues so that buyers do not simply walk away. If the vendor were to accept a higher offer after a sale is agreed they would be required to compensate the buyer, so this makes gazumping very unlikely.

If you are planning on selling your home, you need to be aware that around 20% of sales fall through first time, so having a sale reservation agreement in place will give you considerable assurance and reduce the possibility of this happening. Contact us for a chat or free valuation. 

 *figures from Market Financial Solutions.