Our Top Tips to Avoid Being Gazumped
It is with intrigue that we have read recent research from Countrywide Estate Agency showing that one in 20 offers on properties in the South East that were originally accepted by a seller in 2017 were then rejected in favour of a higher one from a different buyer.
It showed the number of properties on which gazumping has occurred is up by 35% on 2011.
The gazumping tactic is a fraught business when a buyer has an offer accepted on a property, they then naturally start to emotionally move in.
It is a terrible disappointment when an estate agent rings to tell them that someone has made a higher offer and the seller is now going to accept the other buyer’s offer.
Gazumping now is a little perplexing as the level of residential property transactions has fallen from its recent high.
However, higher stamp duty tax rates, uncertainties around Brexit and potential higher mortgage rates have put off some buyers from taking the plunge, and some have argued that it’s also probably returned due to a lack of housing. When a sought-after property comes on to the market there are usually a queue of potential buyers and this invariably leads to a bidding war.
Some buyers are so desperate that even when they have been outbid, or they are a new buyer in the area, they are prepared to offer more, even though the property has been sold, subject to contract.
Here at Pindoria Solicitors, we have found from the many thousands of property transactions that we deal with that sellers naturally find it hard to reject more money. The estate agent is under a duty to put forward all offers received at any time.
It’s upsetting for the buyer as they are likely to have incurred search costs, survey fees and some mortgage costs.
Being London conveyancing experts, we have acted for buyers left frustrated that the current system does not give them protection on the property once their offer has been accepted.
Sadly, it’s unlikely that there will be any change to how people buy/sell properties in England & Wales over the next two years and if housing stock for sale continues to fall, then the problem may get worse.
What can buyers do? Out top tips to avoid being gazumped if you are a buyer in a good position:
- Show commitment A seller may not be able to resist a significantly higher financial offer but they may be prepared to give you a better a chance if you book a survey early, ensuring your mortgage offer is issued quickly, and getting on with the legal process by your solicitors.
- Get to know sellers. Sellers will have some emotional investment in you as their buyer if they realise howserious you are about buying.
- Exchange contracts quickly. The quicker you get to exchange of contracts the stronger your position is, as once contracts are exchanged the seller will not be in a position to accept any other offers. Keep in touch with your mortgage broker, solicitor and estate agent and ensure thatprogress is made each week.
- Request that the seller removes the property from the market. Ask the sellers to stop marketing the property once your offer has been accepted.
- Protect yourself with insurance. Home owners’ protection insurance will cover your costs if you are gazumped – the premium is around £60, and will cover survey fees and legal costs if you end up losing out on the property. It could help if the worst does happen.
If you wish to know about buying property, and you need legal property experts call us at Pindoria Solicitors, our team our here to help.