Published: 18/11/2021Approximately a quarter of property sales fall through after the offer has been made and before exchange. One reason for this is 'gazumping.'
When your offer is accepted, you think nothing can stand in the way of you moving into your dream home. You have even envisaged yourself sitting at the kitchen table and placing all your ornaments in your mind's eye. Then, at the eleventh hour, you're outbid by a rival buyer, and you've been gazumped!
As well as the sheer disappointment, gazumping can incur hundreds, sometimes thousands, of pounds in costs as you may increase your offer to try and salvage the deal. But if that tactic fails, you stand to lose all the money you've spent on trying to buy the property in the first place. Either way, you're out of pocket.
Is Gazumping Legal?
UNFORTUNATELY YES! In England and Wales, even though an offer has been accepted, a house purchase is not legally binding until contracts have been exchanged.
We recommend these measures to increase the odds of not being gazumped
Speed is of the essence
In most cases, gazumping happens because a higher offer has been made. However, it may also be because a rival buyer is better positioned to move more quickly.
Arrange your finances quickly
Being a cash buyer is king, but it's important to have a mortgage agreed 'in principle' before starting your property search for most buyers who don't have ready cash.
The better the relationship with the seller, the more likely they will favour you as a buyer. Keep them informed at all times with what you're doing and how close you are to completing the process.
Choose your solicitor and surveyor with care beforehand. One you believe is going to be active and act quickly on your instructions. Also, make sure that all your legal paperwork is in order before you make your offer.
Ducks in a row
If you have a property to sell, get a buyer in place before offering on a property you want to buy.
Make a realistic offer
That way, your seller will know you're serious about buying their property. If they feel they're getting a fair deal, they're more likely to take the property off the market and less likely to be seduced by late offers.
Keep the ball rolling
Complete any paperwork quickly and accurately, return calls as soon as you can and check in regularly with your solicitor so that you can be aware of any hold-ups and perhaps help to solve them. Keeping up the pressure on all quarters will help the process to move along quickly and smoothly.
Once you've had your offer accepted, it's reasonable for you to ask your seller to take the property off the market to reduce exposure. This includes it being taken down from estate agent windows and property portals.
Suppose you're worried about being gazumped, and you've made a good offer. In that case, you could consider asking the seller to sign a legally-binding lock-in agreement meaning they can't entertain offers from anyone else. This agreement sees both the buyer and seller pay a small deposit refunded once the sale is complete but handed to the buyer should another buyer gazump them.
One thing everyone fears is the thought of their property transaction falling through. At Circa London, we are experienced and well versed in keeping all parties in the loop at all times. Our dedicated negotiators do their utmost to minimize the stress and the possibility of transactions failing. No property transaction goes without a hitch or is 100% guaranteed, but keeping our fingers on the pulse and keeping things moving forward efficiently is vital.