To gazump or not to gazump

We are selling our family home (PPR) to move to another location. It went on sale in June and, on advice from the EA, we went sale agreed on the property less than 2 weeks later. It was estimated at 330,000-350,000 and we went sale agreed at 340,000 which I was reasonably happy with, if a bit surprised that we were encouraged to go sale agreed so quickly. Deposit was paid promptly but contracts have not been signed due to delays in buyers securing mortgage, small issues in the survey, solicitors/auctioneers being on holiday etc.

However we were almost ready to sign when a new offer has come in €20,000 higher than the current offer. I'm very torn - it's a lot of money for us and very tempting but we are so close to contracts with the other buyer. I know its legal but I know its a risk and it feels like a crappy thing to do to our buyers. However it would make a huge difference to our life for the next few years.

Has anyone been on this side of gazumping and how did it go?

If the delays were due to the buyers or the buyers messed you around, then I see no problem with accepting a higher offer.

However, in such cases, the second buyer often falls through and you end up back where you started and you might not get €340k.

Brendan

A bird in the hand is worth two in the bush... with cash in hand you will be in a strong position to buy your next home

That's what I'm afraid of-that these new buyers (who appear to be very keen but who knows... ) will fall through and we are back to square 1.

I can't say our current buyers messed us about, things were just slow - I do suspect the EA took their eye off the ball on a few things including not telling us about these new buyers phoning to ask about the property (they eventually landed on our doorstep and we phoned the auctioneer about it).

Also to add, the gazumpers originally offered 350,000 which we declined and they immediately offered 360,000. If we decline that I suspect they will offer 370,000... 30,000 over what we are looking at presently. I would struggle with not taking a risk on that - it's more than my annual take home pay.

How far along are the current buyers in getting their mortgage? While there can be delays this would concern me...and I would want more detail ie is it slow bank admin or do they have an issue? What sort of evidence of funds did they provide when bidding, if at all? What sort of evidence are the new bidders offering? And why did they not get the opportunity to bid when the house was for sale? Was this EA issue or were they just late?

To be fair to the buyers the current delay is on our side as their engineer highlighted a small planning issue (nothing major, just a box to be ticked and that's in progress). When we originally went sale agreed they had a mortgage in principal but this fell through-they have since secured the mortgage elsewhere.

This new prospective buyer is late to the game, very late...

Heart would say continue with original buyer. Head would say look at other expenses/dimensions...if you were to gazump would you be lengthening the process for relocation, paying extra rent, storage, school fees childcare etc if you stay longer where you are. Does this mean the extra incremental money you would make by gazumping would be much smaller? And by starting the process again would you be putting your next home purchase in danger? And would it actually be worth it?

Thank you - this is exactly it. Our hearts say to stick with original buyer but financially the extra €20,000 would have huge value in our particular situation.

We are in an unusual situation in that we can wait - we have alternative accommodation housesitting for a family member for 6 months (in exchange for some fairly extensive pet sitting!) and are building nearby next year. So our timeline is not restricted. In some ways we have nothing to lose if we go for it (except, it could be argued, for our integrity...). If this higher bid goes bust we can put the house back on the market.

I would continue with the original buyer, as to be fair to them, the delay was your issue (even though inadvertently) and not theirs.
I would slightly worry about their original mortgage falling through. Has something changed since they were originally approved?
Also, if your property is "sale agreed", why is your agent entertaining new offers? Unless they are worried about the original buyers falling through. You need to seriously discuss this with the agent to ensure you have all the facts.

Having been on both sides recently, it's nice to be fair to everyone along the way.
Things are rapidly changing at the moment and this time next year you could be kicking yourself instead of settling nicely into your new home.
It's a long painful and drawn out process for everyone involved, don't make it any worse than it needs to be.

Our original buyers have offered €10,000 on their original offer so we have decided to go with that - the much higher offer was tempting but this is a much safer option.

CPM_81 said:

Also, if your property is "sale agreed", why is your agent entertaining new offers?

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The agents have a duty to pass on such information to the vendor.