Is this gazumping?

#1

I recently went through the process of purchasing a property. The agent advised that he would give my formal offer to the vendor - and see if they were willing to sign. They did, and the agent advised me that the offer was accepted. That was on the Friday before a long weekend, he said that they still had an open home that weekend and that there was a possibility that somebody would offer higher.

Is this actually allowed? If the vendor signs shouldn’t it all be done?

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#2

No Tim, this is no gazumping. It may not seem ethical, but it is not illegal. As a purchaser, if you have signed a formal offer (contract) and the agent tells you your offer has been accepted then you are bound. This is because the vendor holds a contract you have signed and so it can be enforced against you. However, as you have only received a verbal ‘acceptance’ from the vendor and you do not hold a document signed by the vendor, you are unable to enforce the contract against the vendor. This is because a verbal contract for the sale of land cannot be enforced.

Peter Mericka
Lawyers Conveyancing

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