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Not very common but yeah they're allowed to. Nothing is binding until exchange as lowbrows said (although it is locked in at exchange).
Sellers/ agents normally stop advertising after accepting an offer but that doesn't stop the gazumping process, they're just being up front about looking for a better offer... -
I had somewhat similar. They kept the place on the market until the mortgage survey was done and then were slow on taking it off. I got the impression the estate agent wasn't pushing it that hard but it was still online.
We ended at a bit of an impasse where I was refusing to instruct a surveyor or have my solicitor progress the deal until it came off the market and a panicked estate agent convinced them to take it off.
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It sounds like the seller isn't particularly happy with the offers they've received and they don't really think you are proceedable / serious so they want you to make some moves that make it obvious you are proceedable and serious. Presumably by getting your mortgage offer sorted and the other stuff.
If I were you I'd get a mortgage applied for whilst simultaneously looking for other flats. If you happen to get your mortgage offer and the stars align you might well get the flat in question, but if it takes ages then it might be that the seller gets a better offer. Wouldn't get the survey done (if at all, lelz) until the mortgage offer is sorted and the money is in place.
We put in an offer on a flat on Sunday, the EA told us that another person had offered and our offers "were close". He asked for our "final offer" which I found a bit daft but we added like 2k to our initial offer and sent it back. He called back later and told us that the seller had decided to not accept either offer and was going to continue showing the flat. The EA tried to encourage us to offer more to persuade the seller. We declined because that sounded like nonsense.
He emailed us today and told us our offer had been accepted, but on the phone told us that the seller was keeping the place on the market for another week and they're pushing us to try and get surveys and stuff organised in a real rush.
Is this a common thing? It sounds to me like they've accepted our offer, unless another offer comes along, which is a lot like not accepting an offer?