Barry Plant Real Estate – "Gazumping" Clause

Posted on May 6, 2008 by | 8 Comments

Peter Mericka B.A., LL.B


 


 


 





 


 


Barry Plant of Barry Plant Real EstateIt would appear that Barry Plant Real Estate has adopted the tactic of having a “gazumping” clause inserted into real estate contracts. We again warn consumers against allowing estate agents to tamper with the contract.


A “gazumping” clause is a special condition which is inserted into a purchaser’s offer by an estate agent. Effectively, it allows a latecomer to the sale to submit a “bid” to the vendor. If the latecomer’s bid is on “more favourable terms” than those in the existing contract, the vendor can invite the purchaser to match the bid. If the purchaser fails to match the bid, the vendor can cancel the contract.

As with other private auction situations, it is possible for a contrived offer to be put to the purchaser, with a view to having the purchaser increase the price or alter the terms of the contract. Such conduct would probably constitute a criminal deception.


The first estate agent to adopt the “gazumping” clause was Ian Reid who became known for having his own Gazumping Clause and his Finance Clause inserted into purchasers’ offers. We exposed the “Ian Reid Strategy” some time ago, but we have not seen it adopted by other estate agents until now.


I contacted Barry Plant to find out why Barry Plant Real Estate had resorted to the use of a “gazumping” clause.


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8 Comments

  • http:// says:

    About time you got him in this blogg but it was a bit late for me but better late than never

  • http:// says:

    No comment from Barry Plant. Silence can only make me assume that he has something to hide.

  • Actually, Barry Plant did say this to me in an email:

    “After nearly forty years as a real estate agent and being part of creating a company of nearly 800 people, with 75 offices selling more than 10000 properties last year, I can confidently say how proud I feel to have chosen real estate as a career and the thought of how many people our company has assisted in achieving their families dreams and aspirations, not forgetting capital growth and security, allows your slant on the real estate industry to pale into insignificance.”

    An estate agent with a big chain of offices and a big ego probably doesn’t see the need to explain anything to anyone.

  • http:// says:

    Dear St. Peter,

    What we really have here is an agent who is looking after the entity who pays his commission, his seller.

    Bravo, Barry’s salesperson needs a pat on the back.

    The buyer would like to take the property off the market at a its price, BUT WITH NO CERTAINTY OF COMPLETING THE PURCHASE, and the buyer well knows this; and so they have agreed to let the seller continue to offer the property for sale, no doubt hoping like hell they sellers don’t get another offer.
    Note the offer has to be higher or have better terms. It is not just any offer.

    To paraphrase the situation. I’ll take your wobbly offer, but until you firm it up you let me be free to take another better offer. If I do get one you match it or move on. That’s fair.

    Loosen the grip St. Peter.

  • http:// says:

    Fair, who said thats fair! If the seller feels that the offer is “wobbly” then why accept it at all? Why not wait until an offer is submitted that isn’t “wobbly”.

  • Well said DEKKM. Note that there is one party who is always a winner in this situation. Don’t worry that the vendor may be stuck with a “wobbly” offer, or that the purchaser may be gazumped, the focus is on the true winner – the estate agent.

    I’m sure that Barry Plant does indeed pat his agents on the back every time they manage to secure a sale through the use of his gazumping clause.

  • For further information on how this gazumping strategy benefits the estate agent over everyone else, see my article on Ian Reid of Ian Reid Vendor Advocacy at http://www.lawyersconveyancing.com.au/news/045_gazumped.asp where the issue is examined in detail.

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