Circa London on gazumping

Published: 20/02/2024

Gazumping in Property Sales: How to Protect Yourself When Buying in Central London

In central London, approximately a quarter of property sales fall through after an offer has been made and before contracts are exchanged. One common reason for this is gazumping, a frustrating and disappointing scenario that can cost buyers hundreds, if not thousands, of pounds in expenses. For anyone looking to buy a home in sought-after areas such as Shoreditch, Old Street, Hoxton, Hackney, Whitechapel, or King's Cross, understanding gazumping is crucial in safeguarding your purchase.

What is Gazumping?

Gazumping occurs when a seller accepts an offer from one buyer, but before the sale is finalised (i.e., before contracts are exchanged), they accept a higher offer from another buyer. Unfortunately, in England and Wales, an accepted offer is not legally binding until contracts are exchanged, which leaves the door open for gazumping. This can be particularly stressful in competitive markets like central London, where demand for properties often outweighs supply.

Why is Gazumping Common in Central London?

In areas where the property market is vibrant and fast-paced, gazumping can be common due to the high volume of interested buyers. Also areas that attract significant interest from buyers, making properties in these locations particularly prone to gazumping. Sellers in these competitive markets might be tempted to accept the highest bid, even if they’ve already agreed to a sale with another buyer.

How to Avoid Gazumping

While gazumping is frustrating, there are steps you can take to minimise the chances of it happening to you. At Circa London Sales & Lettings, we work closely with our clients to ensure they are well-prepared and informed throughout the buying process.

Here are a few key tips to help you protect yourself when buying:

• Move Quickly: Speed is often the deciding factor when it comes to gazumping. If you are able to act quickly with your offer and move the transaction forward faster than other buyers, you may be able to avoid the risk of another buyer outbidding you.
• Get Your Finances in Order: If you’re not a cash buyer, ensure that you have a mortgage in principle before making an offer. Sellers are more likely to take your offer seriously if they know your finances are already arranged. If you're a cash buyer, this gives you an advantage, as it can speed up the process and make your offer more attractive.
• Build a Strong Relationship with the Seller: While it may seem minor, establishing a personal connection with the seller can help your offer stand out. Keeping the seller informed about your intentions and progress can help increase your chances of being favoured over other buyers, especially in areas like Whitechapel or King's Cross, where competition is fierce.

Choose the Right Solicitor and Surveyor

Work with a solicitor and surveyor who are experienced in property transactions and can move quickly. Having your legal paperwork and surveys in order from the outset can help prevent delays that might leave the door open for gazumping.

• Consider a Lock-In Agreement: To protect yourself, you might want to consider requesting a lock-in agreement from the seller. This legally binding contract can prevent the seller from accepting other offers during a certain period and gives you peace of mind while you finalise the purchase.
• Make a Fair and Realistic: OfferIf you make a fair offer based on the current market value of the property, it’s less likely the seller will entertain higher bids. Be realistic with your offer and ensure it reflects the value of the property in areas like Hoxton or Shoreditch, where prices can fluctuate.
• Keep the Process Moving: Once your offer is accepted, stay on top of all paperwork and communication. Promptly return calls, submit required documents, and regularly check in with your solicitor to keep the process moving smoothly. The faster everything progresses, the less likely the seller is to be tempted by a higher bid.
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Final Thoughts

Gazumping can feel like a serious setback, but by following these practical tips and staying proactive throughout the buying process, you can minimise the risk of losing out on your dream property. At Circa London Sales & Lettings, a trusted independent central London estate agent with offices in Shoreditch and Bankside, we are here to guide you through every step of the property buying process, ensuring you are well-prepared to avoid potential pitfalls like gazumping.

Whether you're looking for a property in Shoreditch, Hackney, Bankside, Southwark or another sought-after part of central London, we are here to help make your home-buying experience as smooth and stress-free as possible. Don't let gazumping stand in your way – reach out to us today to get started on securing your new home.