THE GAZUMP BUMP

There was a word that became popular in London during a great property boom in the 1970s. That word was ‘gazump’. Until then I had never heard of it.

It has since made the dictionary. It means  to raise the price of a property after accepting an offer from a buyer but  before the  contract has been signed. I think it comes from the Yiddish word ‘gezumph’ which means to swindle.

It’s back in usage in Melbourne today. Not so much over the buying of property but over renting. In recent weeks I have been helping a friend look for an upmarket rental property and at first I thought some of the stories I was hearing were urban myths. Pardon the pun. That people were seeing places advertised in the classifieds and then rushing to inspect them and offering to pay more than the person in front of them.

It seems this rapacious and desperate reality is worrying the nabobs at the Real Estate Institute of Victoria because vacancy rates of less than 2% are the lowest in nearly a decade.  The institute is now threatening to fine or even expel real estate agents who gazump would-be tenants. Under the new rules (which should have been old rules) once a tenant has been told  their application has been successful no counter-offer can be accepted. And no range of prices can be advertised.

I’m not sure how well this can be policed and, keep in mind, like any business this is about supply and demand. It’s a free enterprise system. I do believe a deal is a deal. A handshake or a verbal contract is a contract as long as credit references check out. But an agent and an owner may not know just what a place is worth, what the market will bear, until they test it.

And it is not always the owners who are the villains. The moonlight flit still exists in this city. I know from personal experience of a person living well beyond their means getting weeks and weeks behind in the rent to a tolerant owner and then simply saying: ‘I can’t pay. I’ll move out soon. Take it out of the bond’. Even when the bond wouldn’t cover it.

Then there are tenants who not only turn a place into a pig sty. They leave it like that.

Tuesday, February 27, 2007

©Copyright Derryn Hinch 2007