Gazumping occurs when an agent accepts an offer you make to buy a property at an agreed price but the property is sold to a third party. This usually occurs when there is a higher offer.
A real estate agent is often blamed for “Gazumping”, but in truth their hands are tied by their obligation to the vendor. A common complaint from our clients – “I paid the deposit and signed on the Contract – yet Agent sold the property to a Third party!!!” Morally Incorrect - YES …. but legally????
In most states Gazumping is legal. If you are gazumped, neither the agent or vendor are obliged to compensate you for any money you may have spent on legal advice, inspection reports, finance application costs or inquires.
While your offer may have been accepted, the agreement between you and the vendor does not become legally binding until contracts have been exchanged. It is in the buyer’s best interest to have their offer accepted with a Section 66W Certificate and payment of deposit to the agent, enabling the contracts to be exchanged upon acceptance of the offer.
Some ways to avoid Gazumping include being organised, act quickly, get it in writing, and consider a 66W. If an agent is presented an offer without Section 66W and less than a 10% deposit, the buyer should be advised of the risk that there is the possibility that a higher offer could be received and accepted prior to the exchange of contracts.
There is no Gazumping when a property is sold at auction because the buyer is the highest bidder on the day and is entitled to the property purchase under their name.
Please contact us on 6989 4656 before you decide to proceed with a contract.
