What is Gazumping and How to Avoid It
Gazumping is a scary concept to consider for buyers, especially when in the process of buying your dream home. It leads to a lot of wasted time and money, especially if you’ve already covered some upfront costs.
What is gazumping, and is it legal?
Many people think that gazumping is an illegal practice – but shockingly, it’s perfectly acceptable. Gazumping describes when a seller has accepted your offer but rejects it before the exchanging of contracts – usually to accept a higher, last minute offer from another buyer.
How to avoid gazumping
Gazumping is an anxiety for a lot of buyers – but there are ways to minimise the risk. If you’re looking for your next home, consider the following when you finally make an offer on a property that’s right for you, to try and avoid gazumping.
Find help in advance
Finding the right conveyancer, solicitor and surveyor can be a long process in itself, so it’s best to get organised well in advance. Take a look at reviews online, ask friends and family who they’ve had good experiences with, and get an idea of the solicitors you’ll use in advance. Don’t forget that you’ll need to consider conveyancing fees too.
Mortgage in principle
Always have your mortgage in principle ready before you make an offer in a home – while this isn’t a confirmed mortgage, it speeds the process along, as both the seller and their estate agent can see you already have a plan in place for the funds.
Ask the seller to take their home off the market
As part of your offer, to try and avoid gazumping, you can ask the seller to take their home off the market, which will lessen the chances of other sellers making offers. This is a fairly standard practice and sellers are usually happy to do this – you could even consider it a red flag if they aren’t.
Lock-in agreements are a little less common, and some sellers can be a little weary about signing them, but they’re a binding agreement which prevents them from negotiating with any other parties. However, it does usually require both buyer and seller to place a sizeable deposit down, and can be a little complicated as a process, but it’s a good idea nevertheless if you’re particularly worried.
How to deal with gazumping
Nothing is more frustrating than thinking you’ve secured your dream home, before realising you’ve been gazumped. If you’ve found yourself in this situation, you have a couple of options:
- Gazump your gazumper: Review your finances and think carefully about whether you can afford this – you don’t want to overstretch yourself. However, you could secure the property back with a higher offer – just be aware that they could come back with an even higher offer than yours.
- Sell yourself: Highlight the reasons why you are a better candidate for the house. It could be that you’re a first-time buyer with no chain, you’re paying for the house in cash, or you’re completely flexible on moving dates. The other person may have gazumped you, but they could be stuck in a broken chain – and that’s where you may have the edge.
If you’re in a property chain and need the sale of your home to be completed before you can buy your next one, consider using a cash house buyer. Here at Good Move, we’ll provide you with a cash offer in just 24 hours, and can sell your home in as little as 7 days – so you’ll have your equity out and ready to finalise the sale of your new home as soon as possible.