Newspaper article The Evening Standard (London, England)

A Matter of Honour? Homes & Property Lawyer Karen Whitburn Answers Your Questions

Newspaper article The Evening Standard (London, England)

A Matter of Honour? Homes & Property Lawyer Karen Whitburn Answers Your Questions

Article excerpt

lawyer Whitburn questions My wife and I have found a property we want to buy but there is keen competition.

We have been told that the seller wishes to go to sealed bids and we should make our "best and final" offer by Friday. If our offer is accepted, what can we do to protect ourselves against someone making a higher offer while our solicitor is carrying out searches and settling the contract? Until exchange of contracts a seller can withdraw their property from the market at any time, even if they have accepted an offer. The seller has no formal obligation to a buyer until contracts are exchanged.

During the pre-exchange period, you will incur the cost of a survey, conveyancing searches and legal costs, while relying on your seller to act honourably and not accept a late offer from another party.

One way of obtaining some comfort is to enter into an "exclusivity agreement", also referred to as a "lock-out" agreement. This will commit you to instruct a solicitor to carry out searches, investigate title and settle the contract, and to progress any mortgage application.

In return, the seller will agree not to market the property or submit a contract to another party for a specified period of time. An exclusivity payment is usually made to the seller, which is offset against the deposit payable at the time of exchange.

While the exclusivity agreement does not create any interest in the property, you could have an action for breach of contract should the seller go against the terms and deal with someone else. If the seller acts in breach, you cannot force them to sell the property to you, but you may be able to recover any losses you have suffered.

I am a first-time buyer. I have already exchanged contracts to buy a flat and asked for permission to visit the property between exchange and completion, to measure for curtains, furniture and so on. …

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