Gazumping – Any chance of compensation?

With prices rising, it is inevitable that occurrences of gazumping will become more frequent.

In last years’ annual report, The Property Ombudsman highlighted a classic example of Gazumping which is clearly driven by the estate agent and leaves a seemingly good buyer high and dry.  In this example case, ‘A Festive Failing’, the buyer had agreed to delay exchanging contracts to help out the seller, only to find that they are subsequently gazumped.  From what I read, it appears that while the buyer waited patiently, the agent conducted a viewing and negotiated a sale with a new buyer.

Given that the original buyer would have gone through the whole legal process and probably shelled out for an expensive survey amongst other things, this probably cost them at least £1000.  If they were selling their own property and there was a chain below, then the damage is likely to be very much more and affect several families in the same way.   

In my opinion the agent involved should be severely reprimanded.  They have deliberately misled a good client and apart from leaving them out of pocket, would have undoubtedly caused significant distress and inconvenience.  In today’s world and with an industry ombudsman in place, one could be forgiven for thinking the buyers could expect some serious compensation. 

In this case the ombudsman’s decision is clear and they are quick to deliver a guilty verdict.  However, it is the amount of compensation which is a complete joke.  Making the assumption that the estate agent is likely to be making several thousand pounds from this deal, an award of £600 must seem like a complete insult to the gazumped buyers. 

So next time you hear a story about bad practise in estate agency, don’t be surprised.  With little danger of punishment when agents break the rules, it is hardly surprising that activities such as gazumping are still common. 

 

A Festive Failing             

Complaint

Mr and Mrs I (the prospective buyers and complainants) were due to exchange contracts on the property two days before Christmas but, on the day of the exchange, it was discovered that the sellers’ proposed onward purchase had suffered flood damage and was the subject of an insurance claim. Although Mr and Mrs I’s money was in place with their solicitor in readiness for exchange, given that the sellers were elderly, Mr and Mrs I did not wish for them to have to move into a water damaged property in the middle of winter. They agreed to postpone the exchange and completion until after Christmas. However, three weeks after the holidays the Agent contacted Mr and Mrs I to inform them that the sellers had accepted another offer and would not be proceeding with them. Mr and Mrs I immediately complained that the Agent had failed to keep them updated.

 

Investigation

The Agent’s file recorded that they had arranged a viewing for another prospective buyer during the

festive period who then offered more than Mr and Mrs I. The sellers rejected the offer however, after

the offer was increased and after taking a number of days to consider the position, the sellers decided

to proceed with the new buyer. During this time the Agent had monitored the negotiations and financially qualified the competing buyer. However, it was clear that not only had the Agent failed to inform Mr and Mrs I that they were continuing to market the property but they also failed to inform them that a competing offer had been received. The Agent simply continued to monitor Mr and Mrs I’s transaction as it proceeded in parallel with the new offer. It was only at the point that the sellers accepted the competing offer that the Agent informed Mr and Mrs I of the situation.

Outcome

I pointed out that, whilst it was the decision of the sellers to whom and at what price the property was

sold, the Agent was obliged (under Paragraphs 7d and 7e of the Code of Practice) to have advised Mr

and Mrs I, in writing, that the property continued to be marketed and to keep them informed of the

existence of any other offers. This they did not do and I had no doubt that the failure of the Agent caused Mr and Mrs I significant aggravation, distress and inconvenience. Indeed, this was particularly so given the fact that Mr and Mrs I had agreed to postpone the exchange date to facilitate the sellers’ wellbeing; that the delayed transaction was so close to exchange; that they were completely unaware of the viewing over the Christmas period or that the competing offer had been in existence since that viewing. I supported the complaint and made an award of £600.

Taken from The Property Ombudsman Annual Report 2012.  

Primary School League Tables 2012 set to shake up schools admissions in Exeter

The Department for Education has issued the latest set of primary school league tables for the UK and it makes for some very interesting reading. These results rank their schools in three categories; what percent of children at that school will get the target level 4 in Maths and English, what percent of students are “high achievers” (the proportion of students likely to achieve significantly above the level 4), and the rather ambiguously titled “value added” score. This, put simply, rates the schools on how much they improve their pupils as they pass through the school.   For this reason, the “value added” score is generally regarded as the most indicative of the quality of a school, rather than schools who have smarter kids or more ambitious parents.

With all this in mind, let’s look at some of this week’s results in more detail.  Firstly, Broadclyst primary seems to be the best all-rounder.   97% of its students are expected to get Level 4’s at KS2 and their value added score is 102.9. It’s leading the way in the Exeter Area and is second in the whole of Devon. Running a close second on Value Added, St Sidwell’s Primary School is a surprise performer, which is all the more surprising when you consider that 41.5% of students don’t have English as their first language.   

The most interesting results for me are, however, the schools that aren’t doing so well.  Competition is fierce for places at St Leonard’s Primary School and at Ladysmith Junior School, yet neither of them are really capitalising on the students they’ve got, ranking 17^th and 28^th respectively in terms of the amount of value added to their students. Furthermore, neither of them are ranked in the top 10 schools for any of the categories.  As St Leonards is regarded as the ‘most professional parish’ in Exeter, one might expect more.  So while it may be that your child is socialising with the “right” kind of pupils and the school-gate experience is very much more in keeping with the parent’s desires, the children might not be capitalising on their education potential.

So what does all this mean for house buying then? Firstly, it means that buying a house in St Leonard’s Parish shouldn’t be the be-all and end-all of your school choices and there are many alternative options out there for your children, where you get more for your money. Properties in Broadclyst do command a premium on price, but then it’s the whole lifestyle you are paying for with a pretty, idyllic Devon village location with an excellent school.   It is likely that with the latest league table, prices are going to be on the up.

In Exeter, properties around St Sidwell’s are much more reasonably priced with plenty of four bedroom properties with a courtyard garden selling for the region of £225k. This area is a little bit of an oddity, as it was significantly influenced by investors snapping up the family size properties for student accommodation.  With the recent restrictions on converting houses to multiple occupancy, picking up a bargain around St Sidwells is become a possibility, as long as you don’t mind sharing your street with an ever-decreasing number of students.

Of the 30-odd schools in the Exeter area, there are lots of positives; there are plenty of good schools, the majority of which are doing well at getting the best out of their students, 82% of students will get the level 4 grade (the government standard level) in their year 6 assessments, and some 30% of students in the Exeter area will be classed as high achievers; working at the same level as the government would expect an average 14 year old to work.

Until now, when families moving to Exeter have asked the local agents where they should live to get their child into a good school, the answer would most likely have been St Leonards.  In light of the recent results, the advice could soon be changing. 

Our Picks:

• Top Overall School:  Broadclyst Community Primary School.

Achieving the highest Value Added score in the area, this village school is forward thinking and community based –  One of many good reasons to move to Broadclyst!

• Top Inner City School:  St Sidwells

A relatively small Church of England school with a definite multi-cultural feel.  Popular with Universtiy families and the local community.

• Top Small School:  Ide. 

Located in a village, just a few hundred yards from the outskirts of Exeter, this school has an intake of only around 15 children per year group.  This makes it a contender for those looking for a smaller school with a community feel. 

In order of Value Added Score the local league table looks like this:

1. Broadclyst Primary Academy Trust
2. St Sidwell’s Church of England Primary School
3. Exminster Community Primary
4. Dunsford Community Primary School
5. Redhills Community Primary School
6. Woodbury Church of England Primary School
7. Exwick Heights Primary School
8. Ide Primary School
9. Clyst St Mary Primary School
10. Kenton Primary School
11. Kenn Church of England Primary School
12. The Topsham School
13. Pinhoe Church of England Primary School
14. Stoke Canon Church of England Primary School
15. Newtown Primary School
16. St Leonard’s (CofE) Primary School (VC)
17. Bowhill Primary School
18. St Nicholas Catholic Primary School
19. Alphington Primary School
20. Newton St Cyres Primary School
21. St David’s Church of England Primary School
22. Brampford Speke Church of England Primary School
23. Stoke Hill Junior School
24. Clyst Heath Nursery and Community Primary School
25. Starcross Primary School
26. St Thomas Primary School
27. Countess Wear Community School
28. Ladysmith Junior School
29. St Michael’s Church of England VA Primary School
30. Walter Daw Primary School
31. Lympstone Church of England Primary School
32. Whipton Barton Junior School

Be Careful What You Read In The Paper!

I was perusing the property section of the Telegraph today and I came across this little piece from their “property sleuth” on his pick of good student investments: http://www.telegraph.co.uk/property/propertypicturegalleries/9393045/Ten-of-the-best-buy-to-let-investment-properties-for-children-going-to-university.html#?frame=2274157 . Picture no. 10 is of a property in Exeter, on the market for £410,000 with Knight Frank. A short amount of searching brings this up on any decent property portal and shows its location as Friars Walk, in the very elegant and sought-after location of St Leonards. So far all well and good…

 

Apart from the fact that this is an ill-informed suggestion! I’d be very intrigued as to who told the folks at the Telegraph that this was a good student investment. They’re encouraging parents who might not know better to spend £150,000 more than they need to (plus any cost of changing the property around) to buy a house in an area that, while a very pleasant one to live in, is miles away from where their children will want to live. It will make a comparatively poor return on investment and, if used as a student property, it will then make it very hard to sell on in future.

 

Having spent some time looking at the Exeter Student Let market and having been a student in Exeter myself, the places to look for student properties are St James, Newtown and Mount Pleasant. There are a whole range of ready-to-go student properties priced anywhere between £200,000 and £350,000 which are much better situated and need no work doing to the property. We have some on the market ourselves and there are many others out there as well.

 

So what do we learn from this? It’s always best to check with a trustworthy local agent before buying in an area you don’t know. Recommendations are always the best way to go so ask around and see who gets recommended all the time. Don’t just trust the national newspaper analysts, they’re unlikely to know the ins and outs of any local market.