Buying by Private Treaty

The risk of being gazumped

Buying by Private Treaty

Most property in Ireland is sold by private treaty. Under this method, a price is put on a property by the vendor which is usually subject to negotiation between him and prospective buyers.

A number of sales occur outside the normal system of auctions and estate agents, and you won’t find out about these unless you know where to look or have a well-connected ‘agent’ in Ireland. However, by far the majority of sales are conducted through estate agents (see below) and it’s rare for developers to sell directly as in some other countries.

If several people are interested in buying a property, the selling agent may suggest a closed or private tender, whereby written or oral bids must be submitted by a set time on a ‘best and final offer’ basis. Normally in such cases, the highest bidder secures the property, but not always. If, for example, an offer is subject to the sale of another property, a lower offer from a first-time buyer or someone who’s in a position to buy unconditionally may be accepted instead. In a private treaty sale, you must bear in mind that the purchase isn’t secure until all the formal documentation has been signed and exchanged between the buyer and seller. Up to that point the seller may still accept a higher offer, in which case the original buyer is said to have been ‘gazumped’. It is, in fact, the agent’s duty to inform the seller of all offers received at any time during the selling process. Gazumping isn’t as common in Ireland as it is in the UK (the Irish blame the British for ‘exporting’ this unethical practice), but it’s happening more frequently nowadays.

‘Starter’ homes targeted at first-time buyers often sell within two weeks of coming on the market. Estate agents will usually be offered the asking price on the first viewing, but may then invite bids from other would-be buyers in an effort to increase the price. If a higher bid is accepted, your deposit will be returned, but there’s nothing you can do to oblige the vendor to honour the agreement. You simply have to start looking for another property and try to put all thoughts of the one you thought you were buying out of your mind!

Further reading

Does this article help?

Do you have any comments, updates or questions on this topic? Ask them here: