Gazumping on the rise - Buyers thwarted by later bids
HOMEBUYERS in the Tweed have been warned of being gazumped - beaten to the post by another eager buyer even after their offer has been accepted by the seller. The practice is becoming more common despite a slower real estate market, according to agents. And it is especially galling on the Tweed where a growing number of buyers from Queensland are stunned when it happens because the Queensland system of immediate contract exchange has for years eliminated gazumping. Chairman of the Northern Rivers division of the Real Estate Institute (REI) Carl Petersen said Queensland buyers were left particularly unhappy if they were gazumped because they were not expecting it. He said the Queensland legal system allowed real estate agents to exchange contracts immediately, with a five-day cooling-off period for the purchaser. While NSW also allowed agents to do that, he said most solicitors encouraged their clients to allow them to carry out the contract exchange which could take place two or three weeks after an offer was accepted. "Therein lies the problem," said Mr Petersen. "Until the contract is exchanged we must put all offers to the vendor. "Some vendors will do a handshake and say I'm not interested in higher offers. But we could have three people look at a property and one person will come back in a couple of days and make an offer that is accepted. "Two days later one of the others comes in and makes a higher offer." REI State president Rowen Kelly said gazumping was on the increase because buyers have been lulled into a false sense of security by the slowing market. He said more and more potential buyers were delaying signing contracts and some were finding themselves missing out when a second buyer made a better offer. "Even once an offer has been accepted some buyers are delaying signing a contract under the misconception they might somehow get a better deal," he said. "If someone makes a better of even similar offer while you are using delaying tactics, the vendor has the right to accept that offer and sign the contract with the second buyer."