The latest buzz phrase was coined last week in the national press, although it’s a tactic that’s been used by many buyers for years.
“Ghost gazumping” is hitting the headlines, principally as a result of property prices beginning to soar once more in the capital. Whereas common-or-garden gazumping means that the vendor chooses to accept, then unceremoniously reject an offer in place of a last minute higher offer from a third party, there are no third parties involved at all in ghost gazumping. Instead, the vendor decides that actually, their property has probably risen in value even during the time between accepting an offer and exchange. It is for this reason that they will then put a huge spanner in the conveyancing works, by asking for more money.
Outside of exchange day, nothing is more likely to give an estate agent a massive headache than to progress right down the line of a sale, only to be dragged abruptly and potentially back to square one when the vendor decides they could probably squeeze more money out of the poor buyer. It seems however, that some agents relish the idea of a good ghost gazumping and will directly approach vendors, positively encouraging them to halt proceedings and ask for more – presumably to try and attract a higher commission.
This kind of tactic will do little to dilute the image of money-hungry estate agents in the eyes of the consumer and should you take this approach, then be aware that you run the risk of damaging your brand reputation for the foreseeable future.
As property prices continue to rise at this fast pace, the problems of gazumping and ghost gazumping are also likely to escalate. We wonder therefore, whether England will shortly follow in the footsteps of Scotland, by making offers legally binding. Surely this is the only way forward, to stamp down on over ambitious vendors?
What are your thoughts on gazumping and ghost gazumping? Should the government take steps to eradicate these tactics by altering the law surrounding offers or would such a move negatively impact upon estate agents by removing the opportunity to maximise commission?