It appears from the national press that we now have a new word – ‘Gazanging‘ – to describe what happens when someone selling their home decides not to go ahead (just) before contracts are exchanged.
But anyone considering Gazanging (a Gazanger?) should perhaps look carefully at the terms of the contract with their estate agent.
It is usually assumed that in England and Wales both purchasers and vendors can withdraw without liability from an agreed property sale at any time up until written contracts have been formally exchanged.
This is generally true as regards any costs or loss incurred by the other party, but obviously each party will be liable for any costs which they have incurred themselves.
Estate agents will clearly be unhappy at doing all the work to find someone willing to buy a house and then find their own client Gazanging. As such they can be expected to be looking carefully at their terms of engagement and trying to recover commission from a seller who decides not to go ahead (Gazangs presumably?)
Agents are traditionally entitled to commission for introducing someone who is ‘ready, willing and able’ to purchase. This has been interpreted as meaning that contracts must have been exchanged, because a potential buyer could back out at any time up to exchange. But what if the owner decides not to go ahead when a prospective buyer has already got their mortgage offer, signed the contract and paid the deposit to their Conveyancer? In other words, everyone is ready to exchange?
Could it not then be argued that they are ready, willing and able, in which case the agents would be justified in claiming their money?
No doubt agents will now be looking carefully at their own terms of business, and may consider revising these to ensure that they can claim commission from sellers who consider Gazanging at the last minute.