I had put down a holding deposit on a property I wanted to purchase. The agent agreed verbally to my offer but I have now been informed that the property has been sold to another person. I have spent money on getting legal advice and conducting searches on the property. What can I do?
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Answer by Neha Sharma, Hillsdale 2036 NSW
- This situation is often referred to as 'gazumping' in NSW and occurs when despite having a verbal agreement with a vendor to purchase the property at an agreed price the property is sold to another person. This is true even if that person has put down a holding deposit on the property.
- If you are gazumped you cannot claim compensation from the agent or from the vendor for any money that you may have spent for your intended purchase. You are entitled to get your holding deposit refunded in full. If you are serious about purchasing a property you should always:
- try to have finance approval finalised in advance;
- seek legal advice on the contract of sale as soon as possible;
- exchange contracts with the vendor as soon as possible.
- Remember you have a 5 day cooling off period during which you may conduct your searches. If you want to rescind the contract within the 5 days you will lose 0.25% of the purchase price.