Gazumping

As in Vancouver, the housing market in London is booming, so much so that it can sometimes be difficult to see the buildings themselves through the estate-agent signs. Of course, like practically everything else here, buying a flat or a house works in a slightly different, much more stressful way: once your offer on a property is accepted, the sale of that property becomes "subject to contract."

This doesn't mean that the sign outside gets taken down; on the contrary, the sign remains up, with the phrase "subject to contract" added to the sign under the word "sold." In theory, this protects the buyer and seller, as either party can pull out of the sale, subject to issues like building inspections or finalisations of mortgages. In practice in a sellers' market like London's, it means that the estate agent can continue to advertise the property, with the effect of an auctioneer calling out to other potential buyers, "Going once, going twice . . ." and even though the buyer puts out additional non-refundable expenses (surveyor's fees, solicitor's fees, mortgage fees) in the period between having an offer accepted and signing the final contract, this money can disappear if the seller accepts another higher offer in the interim. This horrible experience, along with a seller using a higher offer to then get you to up your offer after it has already been accepted, is called "gazumping," as in: "I got gazumped." Of course, if you're part of a chain of buyers and sellers, whose purchase depends on selling another property, any instance of gazumping anywhere along the chain could affect your transaction. The whole thing must be immensely stressful, and in fact, the English housing market sounds like a tangle of red tape, waiting, and gazumping. Apparently the London market is the most notorious for this, probably due to the fact that in the typical amount of time between a buyer having an offer accepted and finally signing the contract, the value of the property can increase by a substantial amount. As for other parts of the UK, I couldn't believe it when someone first told me how the housing market works in Scotland. If you don't already know, I'm guessing you won't be able to believe it either! Properties are advertised without a selling price; instead, "offers over" a certain amount are suggested, along with a deadline. Then, if you're interested in the property, you submit a sealed offer by the deadline. After the deadline has passed, the seller's estate agent or solicitor opens all the sealed offers, and the highest offer is accepted, immediately forming a binding legal agreement. The problem is that potential buyers have NO idea what anyone else is offering, and that information remains private, so whether you get the property or not, you never know how much more or less money would have been required to have your offer accepted. Buying a property in Scotland isn't a series of negotiations; it's just a one-time bid into the real-estate unknown. So when you buy a property in England, Wales, or Scotland, you apparently have your choice between fear of gazumping and fear of misbidding. Suddenly the life of the lowly flat-letter doesn't seem so bad!