Believe it or not, gazumping can and does happen in France. We take a look at why it happens and what can be done to prevent it…
In the current economic climate, and with all the negative press surrounding the housing market at present, gazumping is actually more likely to happen since buyers misconstrue the number of other people in a position to buy too. Add in the fact that it’s a “buyer’s market” with vendors more open to price negotiation and it becomes clearer to see how you could be out-bid. For example, if you offered a vendor a reduced price, they may accept since they are in a rush to sell, only to be offered a higher price from another buyer perhaps days or even weeks later; if the vendor has not signed the compromis de vente, and only verbally accepted your offer, there is absolutely nothing you can do about it as it is impossible to prove that your offer was accepted first.
At French Entrée, we have had a case in which a house in Brittany had been on the market for over a year, without any offers, and then suddenly it had three offers in the same week. This proves that you never know how much interest any particular property may have – while some take weeks to sell, others may take years.
Gazumping can take place when overseas buyers have to return home without getting the vendor’s signature on the compromis de vente and they wrongly assume that the vendor will sign before their return to France.
Once you have found a house that you are serious about and wish to make an offer, the ideal thing that any serious buyer should do in order to avoid being gazumped is to get the vendor to sign the compromis de vente as soon as possible. With both parties’ signatures on the contract there is no way a vendor can go against their word unless they are prepared to pay significant fines amounting to probably more than the difference between your offer and the higher offer.
Hayley Hervé, estate agent for Agence de la Seulles based in Normandy, tells us what else a buyer can do if they are unable to get the vendor to sign the compromis de vente straight away: “If you are unable to get the vendor to sign the contract before you return home, or there are a number of days between their acceptance of the offer and the opportunity to sign the contract, ask for written acceptance from the vendor. This paper could therefore stand as evidence against the vendor if you were gazumped and wanted to take the case to court.”
Another reason why you may not be able to get the vendor to sign the compromis de vente immediately is if they are still waiting for the technical diagnostic surveys to be conducted. If the vendor does not provide up-to-date reports to be attached to the compromis de vente, they must take full responsibility, by law, if any hidden defects, such as termite infestation, are discovered later. Furthermore, if certain reports came back positive, such as the report on natural risks, the buyer would be in a position to cancel the contract or reduce the price. To prevent such risks, the majority of vendors will want to get the reports completed before putting the house on the market and therefore, although possible, it is rare for contract signing to be held up because of this.
Hayley adds: “It is possible to sign the contract with your estate agent at their office. It is best to arrange to go there at the same time as the vendor so that both parties can sign the contract together.”
In order to sign the contract you will just need your passport and marriage certificate (if applicable).
Remember that once both parties have signed the contract, the buyer, unlike the seller, has a seven day cooling-off period in which they can change their mind about the offer.
At least once both parties have signed the compromis de vente the buyer is protected from being gazumped, unlike in the UK, where gazumping can happen much further on in the process since contracts are exchanged later.
By Nina Richards, FrenchEntrée.com