Life Homes

Saturday 30 August 2014

Can the emotional pain of gazumping trump a dumping?

Mark Keenan

Published 11/04/2014 | 02:30

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US research suggests that between 20pc and 25pc of engagements end in a break up. Photo: Getty Images.
US research suggests that between 20pc and 25pc of engagements end in a break up. Photo: Getty Images.

When a couple gets engaged, their announcement is seen as a statement of intent to the world that they've agreed to commit to the full contract of marriage.

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But as we know, it doesn't always work out – US research suggests that between 20pc and 25pc of engagements end in a break up.

Sometimes the very state of being engaged focuses the mind on the contract at hand and results in the split.

Sometimes circumstances change during the period of the engagement or revelations emerge that cause a change of heart in one or both parties.

When an engagement breaks, most of us feel duly sorry for the parties concerned (some might be secretly delighted) but we acknowledge that that's life, that things move on; that they'll eventually get over it and that in the long run, the break up was ultimately for the best.

But sifting through recent tales of woe experienced by the newly gazumped in Dublin's heated property market – which have featured in print and on radio of late – you might wonder whether a gazumping trumps a dumping in terms of emotional damage to the spurned party.

Right enough, finding yourself unexpectedly dumped from a house deal can be a big emotional let down – buyers who go 'sale agreed' believe they have found their dream home and have mentally prepared themselves to settle down with it.

A gazumping can also be a very costly affair – estimated in wasted surveyor and solicitor fees at between €1,500 to €2,500.

The cost is even higher when you consider the real cost of parking your home hunting activities for a period of four weeks during which the price of the house type you were chasing could have risen by €3,000 to €5,000 at current rates of inflation in Dublin.

So you could end up burned to the tune of €7,500 plus in real terms – the cost of a pretty chunky diamond ring.

Gazumping – the process whereby a vendor walks away from a 'sale agreed' – has become a more frequent experience in the Dublin market where houses are in short supply and sneaky usurpers are more frequently accosting 'sale agreed' vendors with offers of €10,000 or more to persuade them to break off with their buyer to be.

However anecdotal evidence suggests its frequency has not yet become as common as the broken engagement.

The reality is that most estate agents who have taken a deposit will not engage a new offer, other than make their client aware of it and place its proponent on the 'cancellation list' in case the sale falls through.

Contrary to belief, it's not worth an estate agent's while re-opening a sales process they thought they had closed for the sake of what is generally a few hundred quid more of a fee.

But the estate agent is legally obliged to pass on details of any substantial new offers to their clients whenever these emerge. So gazumpings, when they occur, are usually driven by unscrupulous and greedy vendors. Or some would argue, practical ones.

Breaking it off on a 'sale agreed' it is not illegal and there are reasons for this. Like an engagement, the 'sale agreed' period is designed to be a 'safety net' period in which either party can pull out if they realise they're not getting what they expected.

Similarly a buyer might find that the house is structurally unstable or the title is not clean and might want to leave the process as a result for a better deal elsewhere.

We forget that for most of the past decade, it was generally the buyer who broke the terms, before coming back again looking for a reduced price in a falling market – what's known as 'gazundering'.

It means that the best attitude a home hunter in Dublin's fraught climate can have is to be fully aware – always – that 'sale agreed' is never 'sold'. Until the names of both vendor and buyer are signed on the contract, there is no deal.

And 'Sale Agreed' is worth what it always was – the price of the paper it's written on.

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