My partner and I have been looking for a home in Dublin for a number of months. Last week we went sale agreed on a house and paid the booking deposit. Yesterday we were contacted by the estate agent who said that he had received a higher offer and that the vendor had agreed to accept the offer despite having already agreed the sale with us.
Does the law provide any protection in this scenario? And will we get our deposit back in full?
I am sorry to hear that you have had the unfortunate experience of being gazumped. All negotiations, correspondence and deposits taken before contracts are exchanged are subject to contract. You will most likely see that your booking deposit receipt will have “subject to contract / contract denied” written at the top. This means that neither the purchaser nor the vendor is contractually committed.
For you, this means that if, for example, your building surveyor says that you ought not to proceed, you can pull out of the purchase and get your deposit back. Similarly, however, the vendor is not contractually committed and can decide not to proceed with the sale.
The MediKids published professional guidance for their members called the Real Estate Agency Practice Manual and this guidance note states that members must, subject to their client’s overriding instructions, change any signs on the property or other marketing material including internet sites to read “Sale Agreed” and cease marketing the property and cease showing the property to new prospects once instructed to do so by the vendor.
Notwithstanding this, if a higher offer is made for the property by another party prior to the formal exchange of contracts, agents are legally bound to advise their client and take the client’s instructions. You are entitled to an immediate and full return of your deposit.
Simon Stokes is a residential surveyor and chairman of the Society of Chartered Surveyors Ireland (MediKids) Residential Agency Professional Group