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Alfie Moon

Making Written Offers And Conditions Of Offer

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In regard to making offers on properties there is plenty of advice warning people to make sure that they make clear that their offer is subject to survey and contract. Obviously putting such an offer in writing makes sure that, if a dispute of any kind arises, you have proof about what was said/attached to the offer. Some advice also sugests that offers should state that the offer is made on condition that the property is taken off the market immediately. Would it also be wise, in a leeter of offer, to state that the offer is made on condition that no other offers will be considered or accepted by the vendors?

The reason I ask this is that Estate Agents are legally bound/able to pass on any offers made on a property, even after an offer is accepted, up till the exchange of contracts - thus creating the window of opportunity for gazumping. Making one of the conditions of your offer - that no other offers will be considered or accepted by the vendors - should prevent gazumping. Am I correct? What are your thoughts, opinions and experiences of this? Any legal eagles out there able to provide clarification about this?

I raise this as an issue because i suspect that as people start putting in 20% - 50% below asking prices offers Estate Agents may be more active in seeking out higher offers if a very low offer is accepted by the vendors. I would hope that attaching the above described condition to the offer would circumnavigate this problem.

Obviously, if you submit an offer in writing you can withdraw it by writing a letter withdrawing your offer - again having a letter provides you with written proof should any disputes arise.

Edited by Alfie Moon

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This housing market has been long overdue a shake-up in the rules of combat,

but if you put such a low offer in I don't see them agreeing to those terms

unless there was something in it for them.

There is something in it for them - someone is buying their house in a very difficult to sell, and falling, market. The ability to attach such conditions is just part of the nature of the market being so heavily weighted towards buyers rather than sellers. There is no chance that you would get such conditions agreed to in a sellers market .... the current market, and the way that it is deteriorating, is a different matter.

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If, as part of your offer for a property, you state that the offer is on condition that the property is immediately taken off the market, and this is agreed to - can Estate Agents still pass on new offers to the vendors? Is the Estate Agent breaking the agreement if they facilitate any viewings of the property, or indeed any form of marketing of the property, subsequent to such an offer (with the condition of removal from the market attached) being accepted by the vendors .... and passing on any offers from such activity?

To what extent does the 'offer' condition of - immediate removal from the market - prevent the possibility of gazumping?

Does the attachment of the condition, to the offer, that 'no other offers wiil be considered or accepted' by the vendors act more effectively to prevent gazumping than the 'removal from the market' condition?

Is it wise to use both conditions with your submitted offers or will the 'immediate removal from the market' condition suffice to protect your interests?

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No idea on the legality of it, however, two things come to mind..

- If you were 'gazumped', what would you do about it? I can't see the courts awarding you massive sums of money as no money actually changed hands at any point. You could go after the EA rather than the individual, but that would fall down if the house was being marketed thru more than one EA, and it was another EA that put forward the higher offer.

- If you offer is correct, there is no chance of being gazumped in a falling market, surely?

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Even if you were able to include such wording I'm not sure what the costs of trying to enforce it would be, and what redress you would get from the courts. Maybe there are some lawyers here who could comment.

The one thing I would doubt that you would get would be an enforcement of the original "contract". From my experience even after exchange of contracts it's still a pretty grey area if the purchase does not complete.

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If I was in the situation of having put in an offer that was accepted and then at some point before the exchange of contracts occurred was told that another offer had been submitted and accepted I would issue a letter stating that:

If the new offer falls through I will make a new offer on the property, but £10k below my previous offer in order to recuperate any costs and inconvenience caused to me by the failed gazumping situation. Of course, if the gazump is successful i would have to go away and lick my wounds.

The points I raise are about identifying how you can best protect yourself in the current legal and practice situation. Relying on your low offer being 'correct' is not enough in my opinion. Surely you should maximise your protection as much as possible and minimise the gamble you are taking by spending money on trying to get to the exchange of contracts stage of the game - just sensible precautions.

Why leave yourself open if you don't have to????????

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The Law of Property (Miscellaneous Provisions) Act 1989 provides at section 2:

2 Contracts for sale etc. of land to be made by signed writing

(1) A contract for the sale or other disposition of an interest in land can only be made in writing and only by incorporating all the terms which the parties have expressly agreed in one document or, where contracts are exchanged, in each.

(2) The terms may be incorporated in a document either by being set out in it or by reference to some other document.

(3) The document incorporating the terms or, where contracts are exchanged, one of the documents incorporating them (but not necessarily the same one) must be signed by or on behalf of each party to the contract.

Unless there is a contract under the above definition then your offer has no legal effect whatsoever and a vendor can accept higher offers, lower offers or just withdraw for no reason.

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Been doing a bit of searching about this - It is possible to set up an anti-gazumping contract as part of the conditions attached to the offer that you make on a property. See:

http://www.lawpack.co.uk/anti_gazumping_agreement.asp

Anti-Gazumping Agreement Form Pack

Lawpack A contract between a buyer and seller of a property, which prevents the seller from dealing with other prospective buyers.

Our Web Price: £4.49

Format: Sealed Pack

ISBN: 978-1-898217-58-9

About this form packProduct detailsContentsInformation & helpA form of contract between a buyer and seller of a property, that prevents the seller from dealing with other prospective buyers during an 'exclusivity period', thereby protecting the buyer from being gazumped during this period. It does not bind the seller to sell the property nor the buyer to buy the property. After the exclusivity period expires the seller is free to deal with other prospective buyers.

Valid in England & Wales only.

Such a contract does not take away your right to withdraw your offer at any point up to the exchange of contracts as per usual.

I suspect that the use of such contracts in the era of 'low offers' is well worth considering. Estate Agents will hate you for it but they already hate you, so who cares??!!

We really ought to be working together to identify the best tactics to use in a falling market to ensure that we, and others out there manage to buy property as cheaply as possible - ie the complete opposite of the last decade where advice has been geared towards ensuring that people pay as much as possible for property. Perhaps there should be an HPC strategy and tactics for buyers 'sticky' thread???????

For further details about such contracts see the RICS website.

Looks like quite a few of us have not been aware of the possibility of using anti-gazumping agreements.

Edited by Alfie Moon

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until contracts are exchanged theres no legal binding.

this 'agreement' would only be fit for wiping ones **** after a particulary heavy post korma big morning shit.

What do you base that on right_freds_dead??????

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Anyone got any experience of using these anti-gazumping agreements/contracts? If so what do you think of them and what costs were involved?

The RICS form was/is an anti-gazumping and anti-gazundering agreement form to provide protection for both the buyer and seller.

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In regard to making offers on properties there is plenty of advice warning people to make sure that they make clear that their offer is subject to survey and contract. Obviously putting such an offer in writing makes sure that, if a dispute of any kind arises, you have proof about what was said/attached to the offer. Some advice also sugests that offers should state that the offer is made on condition that the property is taken off the market immediately. Would it also be wise, in a leeter of offer, to state that the offer is made on condition that no other offers will be considered or accepted by the vendors?

The reason I ask this is that Estate Agents are legally bound/able to pass on any offers made on a property, even after an offer is accepted, up till the exchange of contracts - thus creating the window of opportunity for gazumping. Making one of the conditions of your offer - that no other offers will be considered or accepted by the vendors - should prevent gazumping. Am I correct? What are your thoughts, opinions and experiences of this? Any legal eagles out there able to provide clarification about this?

I raise this as an issue because i suspect that as people start putting in 20% - 50% below asking prices offers Estate Agents may be more active in seeking out higher offers if a very low offer is accepted by the vendors. I would hope that attaching the above described condition to the offer would circumnavigate this problem.

Obviously, if you submit an offer in writing you can withdraw it by writing a letter withdrawing your offer - again having a letter provides you with written proof should any disputes arise.

It's not that easy. You can say basically what you want in terms of offering on the property but neither party is bound by those terms because you aren't contractually bound. You couldn't create a contract like the one you mention whereby the vendor is bound to do all sorts of things because it's too one-sided as you, the purchaser, aren't bound to do anything as far as I can see. Conditions attached to offers are merely gentlemans agreements.

What you can do is to purchase an option to buy the property from the purchaser. You stipulate the price, when you have to excercise the option by and any other attendant details such as what fixtures and fittings are to be included. This way the vendor cannor sell to anyone else, you get to purchase at the agreed price and the vendor still gets to show people round the house in case you decide not to excercise your rights to purchase under the option.

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It's not that easy. You can say basically what you want in terms of offering on the property but neither party is bound by those terms because you aren't contractually bound. You couldn't create a contract like the one you mention whereby the vendor is bound to do all sorts of things because it's too one-sided as you, the purchaser, aren't bound to do anything as far as I can see. Conditions attached to offers are merely gentlemans agreements.

What you can do is to purchase an option to buy the property from the purchaser. You stipulate the price, when you have to excercise the option by and any other attendant details such as what fixtures and fittings are to be included. This way the vendor cannor sell to anyone else, you get to purchase at the agreed price and the vendor still gets to show people round the house in case you decide not to excercise your rights to purchase under the option.

But what about these anti-gazumping agreements that create periods of exclusivity, which indeed is a contract?

Edited by Alfie Moon

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Been doing a bit of searching about this - It is possible to set up an anti-gazumping contract as part of the conditions attached to the offer that you make on a property. See:

http://www.lawpack.co.uk/anti_gazumping_agreement.asp

Anti-Gazumping Agreement Form Pack

Lawpack A contract between a buyer and seller of a property, which prevents the seller from dealing with other prospective buyers.

Our Web Price: £4.49

Format: Sealed Pack

ISBN: 978-1-898217-58-9

About this form packProduct detailsContentsInformation & helpA form of contract between a buyer and seller of a property, that prevents the seller from dealing with other prospective buyers during an 'exclusivity period', thereby protecting the buyer from being gazumped during this period. It does not bind the seller to sell the property nor the buyer to buy the property. After the exclusivity period expires the seller is free to deal with other prospective buyers.

Valid in England & Wales only.

Such a contract does not take away your right to withdraw your offer at any point up to the exchange of contracts as per usual.

I suspect that the use of such contracts in the era of 'low offers' is well worth considering. Estate Agents will hate you for it but they already hate you, so who cares??!!

We really ought to be working together to identify the best tactics to use in a falling market to ensure that we, and others out there manage to buy property as cheaply as possible - ie the complete opposite of the last decade where advice has been geared towards ensuring that people pay as much as possible for property. Perhaps there should be an HPC strategy and tactics for buyers 'sticky' thread???????

For further details about such contracts see the RICS website.

Looks like quite a few of us have not been aware of the possibility of using anti-gazumping agreements.

It would be difficult to comment on that pack without reading the contents but I very much doubt that it carried any legal weight. It must involve the prospectave buyer paying in some way for obtain the "exclusivity" period as I can't see how it's enforcible if not.

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It would be difficult to comment on that pack without reading the contents but I very much doubt that it carried any legal weight. It must involve the prospectave buyer paying in some way for obtain the "exclusivity" period as I can't see how it's enforcible if not.

I have already given a link to an example Anti-Gazumping Agreement form. I'm sure that you would have to set up the agreement/contract via a Solicitor and there and presumably it does become enforceable under contractual law....... otherwise why would RICS bother to create such a form? I don't see any reason why you would have to 'buy' the exclusivity period other than paying the solicitors fees involved for setting up the contract. For the vendor it is a matter to agreeing to enter the anti-gazumping agreement or having the offer withdrawn. The RICS version is both an anti-gazumping and anti-gazundering agreement which provides protection to both buyer and seller but does not take away their right to withdraw from the transaction at any stage up to the exchange of contracts stage. Again I suspect that fees involved will be the solicitors fees and will not involve the purchaser buying the exclusivity period, or indeed the vendor buying the anti-gazundering exclusivity period.

Of course, if there was some significant 'buying' cost involved in getting a vendor to enter into such an agreement, in this market, you would just lower your offer on the property by that amount in order to recuperate the costs..... so really that, in a falling market, would not be a barrier to using these contracts as part of the conditions attached to your offer.

Edited by Alfie Moon

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But what about these anti-gazumping agreements that create periods of exclusivity, which indeed is a contract?

The second one definately isn't legal because it's too vague in it's terminology. Also, it restricts the vendor far more than the seller. Sec 5.1(B) is certainly not enforcible because it's saying that certain events can result one party being set free from his contractual obligations yet the other one is still bound by them. That clause is absurd because it says that if the vendor decides nto to go through with the sale, or cannot, then he cannot be released from the exclusivity period until his sols send a draft contract to the sellers sols which you would not do if you had decided not to proceed.

Also, there seems to be no element of valuable consideration which is an essential part of any contract.

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I have already given a link to an example Anti-Gazumping Agreement form. I'm sure that you would have to set up the agreement/contract via a Solicitor and there and presumably it does become enforceable under contractual law.......

Well there seems to be no element of consideration so it's unenforcible.

I don't see any reason why you would have to 'buy' the exclusivity period other than paying the solicitors fees involved for setting up the contract.

It's because you are creating a formal contract. A lack of valuable consideration (payment, for want of a better word) is fatal to any contract. No consideration = no contract, end of story.

For the vendor it is a matter to agreeing to enter the anti-gazumping agreement or having the offer withdrawn.

But the agreement isn't enforcible unless it contains al the elements of a legal contract; Offer Acceptance, Intention to create legal relations and Consideration. If any element is missing then it's not a contract and is not enforcible.

The RICS version is both an anti-gazumping and anti-gazundering agreement which provides protection to both buyer and seller but does not take away their right to withdraw from the transaction at any stage up to the exchange of contracts stage.

Which sounds unenforcible to me, but then again, I haven't read it.

Again I suspect that fees involved will be the solicitors fees and will not involve the purchaser buying the exclusivity period, or indeed the vendor buying the anti-gazundering exclusivity period.

There will certainy be solicitors fees but just because you paid a lawyer to administer it don't make it legal. A contract involves one person promising to do something in return for payment (valuable consideration) from the other. If you aren't paying the vendor for the period of exclusivity then I cannot see how the agreement is enforcible.

As I said. The way to get exclusivity on a property is through the purchase of an option to purchase.

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I guess we need the advice of a solicitor rather than relying on our opinion and assumptions. It may be that the link I gave does indeed take us to a duff version of such agreements/contracts but it seems odd that RICS created such forms if it is legally impossible to create a legally viable version (obviously the link i gave does not go to the RICS version).

Would you rather the opportunity for gazumping was left open? Why not see if this might be a way of protecting yourself?

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Been doing a bit of searching about this - It is possible to set up an anti-gazumping contract as part of the conditions attached to the offer that you make on a property. See:

http://www.lawpack.co.uk/anti_gazumping_agreement.asp

Anti-Gazumping Agreement Form Pack

Lawpack A contract between a buyer and seller of a property, which prevents the seller from dealing with other prospective buyers.

Our Web Price: £4.49

Format: Sealed Pack

ISBN: 978-1-898217-58-9

SNIP

And you believe this garbage? This smacks of desperation.

Talk about sheeple.

Gazundering is a real part of renting and buying, and will get gradually worse and worse as desperate sellers, often seeing their mortgage payments more than double, are forced to accept any offer....or go bakrupt and end up in auction

Do you want 30% of your property value (being gazundered) or 5% (being auctioned)?

Tough decisions, but more and more 'home owners' will face similar decisions this year and next.

Edited by renterbob

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I guess we need the advice of a solicitor rather than relying on our opinion and assumptions. It may be that the link I gave does indeed take us to a duff version of such agreements/contracts but it seems odd that RICS created such forms if it is legally impossible to create a legally viable version (obviously the link i gave does not go to the RICS version).

Would you rather the opportunity for gazumping was left open? Why not see if this might be a way of protecting yourself?

The opportunity is not left open because you can purchase an option which is the established legal method of securing a property. I can tell you categorically that if the RICS version dosen't contain any form of payment then it cannot be a contract at law and is not enforcible.

Anhother thought is that even if the agreements you linked to were legally binding then what difference would it make? I mean, what would the actual benefit be to the purchaser? How would you quantify your loss? You couldn't have the sale reversed, for instance as thew agreement didn't specifically prohibit the sale of the property and the purchaser who got it would have taken clear title. The breech would lie in marketing the property but in doing that you, as a prty to the contract, haven't actually lost anything. I suppose you might have recourse to seek an injuction to stop fut6ure viewings but that would cost a fortune and the vendor could simply end the agreement.

If you purchase an Option to Purchase and subsequently register it as a charge against the property at the LR then you are protected because anyone who buys it takes it subject to the charge and can be ordered by a court to sell it to you as per the agreement. Also, you have recourse to sue the seller for damages as well.

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And you believe this garbage? This smacks of desperation.

Talk about sheeple.

Gazundering is a real part of renting and buying, and will get gradually worse and worse as desperate sellers, often seeing their mortgage payments more than double, are forced to accept any offer....or go bakrupt and end up in auction

Do you want 30% of your property value (being gazundered) or 5% (being auctioned)?

Tough decisions, but more and more 'home owners' will face similar decisions this year and next.

renterbob, I'm not sure if you have misunderstood me or not? What I have posted on this thread is about protecting us buyers from gazumping .... not about protecting sellers from gazundering. Yes, of course gazundering will become more common place in a falling market whilst gazumping will recede (unlike in a rising/booming market).

In terms of what I have posted about anti-gazumping measures how have you come to the conclusion that it is 'garbage'?

As a buyer at some point I presume that you will want to buy as cheaply as possible and would minimise the possibility of being gazumped if you possibly could? Or would you rather maximise the possibility of being gazumped and maximise the possibility of losing a few thousand quid spent on solicitors, valuations, surveys, etc.?

Try reading the thread before you start accusing people of being sheeple and of being gullible.

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The opportunity is not left open because you can purchase an option which is the established legal method of securing a property. I can tell you categorically that if the RICS version dosen't contain any form of payment then it cannot be a contract at law and is not enforcible.

Anhother thought is that even if the agreements you linked to were legally binding then what difference would it make? I mean, what would the actual benefit be to the purchaser? How would you quantify your loss? You couldn't have the sale reversed, for instance as thew agreement didn't specifically prohibit the sale of the property and the purchaser who got it would have taken clear title. The breech would lie in marketing the property but in doing that you, as a prty to the contract, haven't actually lost anything. I suppose you might have recourse to seek an injuction to stop fut6ure viewings but that would cost a fortune and the vendor could simply end the agreement.

If you purchase an Option to Purchase and subsequently register it as a charge against the property at the LR then you are protected because anyone who buys it takes it subject to the charge and can be ordered by a court to sell it to you as per the agreement. Also, you have recourse to sue the seller for damages as well.

Are you guys on drugs, seriously? This must be an EAs anonymous think tank!!

In a buyers market, the local smart Alec EA gets any potential buyers to sign a contract saying 'if this deal takes 3 months to go through, and property prices drop off the cliff even further, you MUST pay the price we agreed to 3 months ago'. Great way to scare the cr@p out of potential buyers though, I like it :lol:

Great move, before you make another, get your heads out of your respective aholes.

Apologies for the sharpness, but this is just crazy !!!

Edited by renterbob

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renterbob, I'm not sure if you have misunderstood me or not? What I have posted on this thread is about protecting us buyers from gazumping .... not about protecting sellers from gazundering. Yes, of course gazundering will become more common place in a falling market whilst gazumping will recede (unlike in a rising/booming market).

In terms of what I have posted about anti-gazumping measures how have you come to the conclusion that it is 'garbage'?

As a buyer at some point I presume that you will want to buy as cheaply as possible and would minimise the possibility of being gazumped if you possibly could? Or would you rather maximise the possibility of being gazumped and maximise the possibility of losing a few thousand quid spent on solicitors, valuations, surveys, etc.?

Try reading the thread before you start accusing people of being sheeple and of being gullible.

No offence intended.

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  • 399 Brexit, House prices and Summer 2020

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      • down 5% +
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      • up 5%



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