When we were scanning the news from the property world earlier in the month, one headline jumped out at us – that one in eight property sales in England and Wales this year has been subject to gazumping.
If you’ve bought a property south of the border, there is a reasonable chance that you’ll have fallen victim to gazumping. In Scotland, however, many buyers will be blissfully unaware of the subject. So does gazumping happen in Scotland and, if not, why not?
What is Gazumping?
Before looking at whether gazumping ever happens in Scotland, it’s worth taking a step back to explain what gazumping is.
In simple terms, gazumping is when a seller accepts an offer for their property from a buyer then subsequently decides to accept another, higher or better offer from another buyer. In many cases this happens some time after the first offer was accepted which can cause anger and frustration for the original buyer.
They may have agreed the sale of their own house and be packed up and ready to move, only to discover late in the day that the home that they thought they had secured is now being sold to somebody else. At that stage they can either increase their offer or accept missing out on the property, neither of which are particularly appealing options.
If the original buyer can’t proceed with the purchase they will probably have to pull out of selling their own property which creates more inconvenience for their buyer and anyone further down the property chain.
Does Gazumping Happen In Scotland?
The short answer is, yes.
The slightly longer answer is, yes, but it is much less common than we see south of the border.
In Scotland, neither the seller or buyer of a property are contractually obliged to buy a property until missives have been concluded. As a result, prior to the conclusion of missives, there is technically nothing to prevent a seller from accepting a higher offer from another buyer.
Why is Gazumping Less Common in Scotland?
In many areas of Scotland, including Edinburgh and the Lothians, the majority of properties are sold by solicitor estate agents. They are bound by the Law Society of Scotland’s guidelines and these are intended to stop gazumping from happening.
Once the solicitor acting for a seller has accepted an offer on behalf of their client, they are not allowed to accept a subsequent offer from another party. If a later offer comes in and the seller wants to accept it, the seller’s solicitor has to withdraw from acting on their behalf and the seller will need to find someone else to carry out the legal work on their sale.
There is, of course, nothing to prevent the seller from doing this as the contract between buyer and seller does not become legally binding until missives are concluded. In practise though, such cases are relatively rare. Changing solicitor after an offer has been accepted may well delay the sale going through and if the seller is also buying a new home, any delay could endanger their onward purchase.
A change of solicitor can also be inconvenient for the seller meaning that, all told, unless the later offer is markedly higher than the one which the seller originally accepted most sellers prefer to continue with the original offer. As a result, gazumping is far less common north of the border than in other areas of the UK.
If you are thinking of moving home, or if you have any questions about buying or selling, feel free to contact us today on 0131 667 0232 or by emailing email@example.com and one of our team will be delighted to help.