Gazumping is when a house seller accepts a higher offer after they have accepted an offer from another buyer. The original buyer is left “gazumped”, often after paying for surveys, searches and legal work.
The phenomenon became popular during the 1980s. And although it’s in decline in England and Wales, it’s still a problem. According to Emoov.co.uk, a quarter of the people who bought a home in 2018 were gazumped. The previous year, more than a quarter of would-be buyers befell the same fate.
While legislation might solve the problem in the future, there are a few things you can do to avoid being gazumped.
Organise your finances
The best way to avoid being gazumped is to get your finances and legal issues organised in advance. If you can minimise the time between agreeing on a sale and the exchange of contracts, the chances of being gazumped reduce dramatically.
The measures you can take to avoid gazumping include:
- Secure your mortgage “agreement in principle” before you make an offer
- Appoint a solicitor or conveyancer
- Make sure you have all the relevant ID and paperwork ready
- Get your property on the market early
- Price your property for a reasonably quick sale
- Where possible, wait until an offer is made on your home before you put in your offer
Insist that the property is taken off the market
As soon as your offer is accepted, stress that it’s on the proviso that the property is taken off the market immediately. And get this in writing. This should give you some legal protection if the seller accepts a higher offer at the last minute.
Ask for the “For Sale” signs to be removed, along with property listings in shops, local publications and the Internet. But remember: the seller doesn’t have to do any of this. If they refuse, proceed with caution.
Keep the process moving swiftly
It’s vitally important that you’re always available to answer questions and sign paperwork. Any delays can increase the chances of being gazumped before contracts are exchanged. Stay in regular contact with your solicitor and mortgage lender. They won’t be as keen to protect your interests as you are.
Strike up a rapport with the sellers
There’s always the chance the homeowner will suddenly accept a significantly higher offer. And, right now, there isn’t much you can do about it. But if you’re on first-name terms with the owners, they’re more likely to regard you as people rather than faceless buyers. Offer a hand of friendship. Strike up a few conversations. Above all, make friends with them.
While you might be confident of the deal going through, you should never take chances. Buying a house costs several hundred — sometimes thousand — pounds. If you get gazumped, you stand to lose almost everything you’ve spent until that point.
Just in case the worst happens, take out specialist home buyers protection insurance. This will cover your loss of upfront expenses, which include mortgage costs, surveys and conveyancing fees.
Buy at auction
If money or time is tight, consider buying your next home at auction. While this route presents its risks, gazumping isn’t one of them. Once your offer is accepted, you sign the initial paperwork and pay the deposit almost immediately.
Sell your home to a national homebuyer
A delay in the sale of your house increases the risk of being gazumped. To speed up the process, sell your property to a national homebuyer such as Sell Property Fast Cash. This negates the need for marketing, negotiations and protracted conveyancing processes. You’ll get up to 100 per cent of your home’s market value, and the quick sale you need to minimise the chances of being gazumped on your next purchase.