When does a contract to sell a home become binding? That may be about to change in England. The Telegraph has the story.
Relief for home buyers as the Government may ban 'gazumping'
"Gazumping could be banned by the Government, as it has emerged that officials have held private meetings with industry to discuss bringing forward the point at which house sales become legal, in line with Scotland.
"The radical move would prevent millions of British housing sales falling through as 18pc, or around 200,000 transactions collapse each year.
"A major reason is a plague of buyers outbidding others who have already put down an offer, a practice commonly known as "gazumping".
"It causes frustration and disappointment for buyers who think they have secured their dream home, only to find they lose it overnight to someone with more cash. It also routinely leaves frustrated would-be-buyers paying for bills for surveying and legal fees which can run into thousands of pounds, providing a further kick in the teeth.
...
"The meeting was used in part to discuss the idea of introducing to Britain the system which already exists in Scotland and in other countries in Europe, under which property sales are legally binding at the point where an offer is accepted by the buyer.
"At present deals made in Britain are only binding once the contracts have been exchanged, giving buyers with big deposits ample chance to "gazump".
While this Scottish-style system could make life much easier for buyers of British homes, experts predicted it would be very unpopular with sellers and could even put them off moving house. "
Relief for home buyers as the Government may ban 'gazumping'
"Gazumping could be banned by the Government, as it has emerged that officials have held private meetings with industry to discuss bringing forward the point at which house sales become legal, in line with Scotland.
"The radical move would prevent millions of British housing sales falling through as 18pc, or around 200,000 transactions collapse each year.
"A major reason is a plague of buyers outbidding others who have already put down an offer, a practice commonly known as "gazumping".
"It causes frustration and disappointment for buyers who think they have secured their dream home, only to find they lose it overnight to someone with more cash. It also routinely leaves frustrated would-be-buyers paying for bills for surveying and legal fees which can run into thousands of pounds, providing a further kick in the teeth.
...
"The meeting was used in part to discuss the idea of introducing to Britain the system which already exists in Scotland and in other countries in Europe, under which property sales are legally binding at the point where an offer is accepted by the buyer.
"At present deals made in Britain are only binding once the contracts have been exchanged, giving buyers with big deposits ample chance to "gazump".
While this Scottish-style system could make life much easier for buyers of British homes, experts predicted it would be very unpopular with sellers and could even put them off moving house. "
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