Gazumping is when your accepted offer is trumped by another buyer. Here’s how to minimise the risk of it happening to you.
Gazumping can happen at any point right up until the exchange of contracts which is when the sale becomes legally binding.
This often wastes valuable time and money when preparing to buy the property.
It can be very disappointing, as any buyer who has been gazumped before will testify.
Gazumping is completely legal and can happen at any point of the sale until the contracts are exchanged.
That’s when your agreement with the seller becomes legally binding.
It’s worth remembering that the home buying process is slightly different in Scotland though, where a formal offer is put forward by a solicitor.
Why buying a home in Scotland is different to in England and Wales.
The good news is that there are steps you can take to reduce the risk of getting gazumped.
It’s a good idea to line up professionals, such as a surveyor, mortgage broker and solicitor, in advance. And have all the necessary documentation to hand, including the required ID.
Make sure your finances are in place. If you need a mortgage, get a mortgage agreement in principle. This is essentially a letter from a mortgage provider setting out how much they would be willing to lend, based on an initial assessment of your circumstances.
When striking an agreement with the seller, ask them to take the property off the market. It'll help reduce the risk of the property attracting attention from other buyers.
The seller is not obliged to do this, but you may want to question their reasons if they say no.
Make sure this request is done in writing so you have a record of it.
Take the time to get to know the seller and show them that you’re a serious buyer with your heart set on their property.
It could mean that there's less chance of them dropping you at the last minute for another offer.
Think about asking the seller for an exclusivity agreement, otherwise known as a lock-out agreement.
This is where the seller agrees not to seek, or accept, offers from other buyers for a certain period of time.
It'll give you breathing space to get ahead with some of the tasks associated with buying the property.
This could include organising a property survey and finalising mortgage arrangements.
Speak to your solicitor to find out more.
Do all you can to keep the buying process moving swiftly. The shorter the time between striking an agreement and exchanging contracts, the less likely it is the deal will fall through.
Stay in regular contact with everyone involved in the process, such as your solicitor, mortgage broker and surveyor. Make sure you read, sign and return forms as promptly as possible.
Consider getting Home Buyers Protection Insurance.
You can buy it as soon as you've had your offer accepted.
While it won’t reduce the risk of getting gazumped, it's designed to cover you for the loss of expenses you’ve forked out for while preparing to buy the property.
Surveys, legal fees and mortgage arrangement fees can run into thousands of pounds, so it's definitely worth thinking about.
Make sure you read the policy small print.
If the unthinkable has happened and you've been gazumped, here's what to do.
If you’ve still got your heart set on the property, you could try and persuade the seller to reconsider their position.
Find out what their motives are for selling and show them why you’re the best buyer for their property. It could be that you’re a cash buyer or you can move quickly.
You could consider putting in a higher offer. But remember you could be gazumped once again.
Alternatively, you may want to withdraw from the running and search for a different home to buy.
If you would like more information on buying and selling houses in the Solihull and surrounding area, please get in touch with us on 0121 430 4448.
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