Posted: 15th September
Property advice: how to avoid being gazumped
The property market has posted a strong and confident recovery in the past year. Prices have reached their pre-crisis levels and the economy looks good.
All in all, good times are back in the housing market. Or are they?
Sure, demand has returned. But so has the distasteful practice of Gazumping. Only this time, it is more aggressive than ever.
What Is Gazumping?
‘Gazumping’ is when a seller accepts an offer from one buyer, but then accepts a higher offer from someone else. This leaves the first buyer in the lurch, and they either have to offer a higher price or accept that they have lost the property.
The problem is that until contracts have been exchanged, the sale is not legally binding, so either you or the seller can still pull out. But during this period, the buyer will spend a considerable amount of money on surveys and legal fees. If the sale falls through, this money will be lost and the buyer will have to fork out all over again next time round.
As if getting a foot on the property ladder wasn’t hard enough already!
The Good News
The good news is that there are some steps you can take to avoid being gazumped:
1. Insist that the property is taken off the market
When making an offer, ensure that a condition of the deal is that the property is taken off the market. If potential gazumpers don’t know about it, they can’t make an offer on it.
This can also help you spot a seller that may be open to gazumping – if they want to keep on marketing it, they’re probably hoping someone will come in with a higher offer, while keeping you on the backburner as security.
Keep an eye on websites such as Rightmove.com to ensure the property has been labelled “Under offer” or ‘Sold’ – and if it’s not, demand to know why.
2. Sell your property before buying another
Sellers may be more inclined to accept an alternative offer if there are delays in a sale, especially in a rising market. A major reason for delay is often that the seller’s buyers can’t find a buyer themselves. By making sure your property is at least under offer before putting in an offer, you can help to reassure them that you’re serious.
3. Exchange contracts quickly
Quite simply, the quicker the sale, the less time anyone has to gazump you. Make it your mission to keep everything moving as swiftly as possible. Make frequent calls to your solicitor to monitor progress; keep in regular contact with your estate agent; fill out required forms quickly and chase up anything you can.