It 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.