Home buyers: how to reduce your chances of being gazumped
Being gazumped in the final stages of buying a house or flat can be heart breaking. How can you reduce the chances of it happening to you?
Looking for information on Gazundering? See: Gazundering can be avoided when selling your home
What is gazumping?
You’ve found the perfect house and made an offer, which has been accepted. The conveyancing process has almost reached completion – then at the last minute, the seller accepts a higher offer from someone else, and you lose the house. You’ve just been gazumped.
Unfortunately for the original buyer in this scenario, gazumping is perfectly legal. In England and Wales, until contracts have been exchanged, the seller is free to accept a better offer.
So what steps can you take to reduce your chances of being gazumped?
Develop a good relationship with the vendor
This is good general advice when house hunting: find a way to demonstrate respect for your seller and their property. Try to find a personal connection. One way to do this is during the viewing (assuming they are present) where you should talk to the seller and make sure that they remember you when you put an offer in.
Flatter the seller and their home. If the seller can see that you love their home as much as they do,they will be less likely to accept an offer from someone else.
Go out of your way to make sure that they like you and consider dealing with you a positive experience. It is harder for a seller to accept a higher offer if they like you. This may sound calculating but buying and selling property can be ruthless and you need to arm yourself as much as possible.
Insist that the property is taken off the market
Unless the seller has a good reason, your offer should be conditional on the basis that the property is taken off the market.
The seller might, for example, object if you have not found a buyer for your property or if you property. Do all you can to put yourself in a 'ready to proceed' position as quickly as possible. Once you receive an offer from a buyer, let the seller know and insist that the property is taken off the market.
Once your offer has been accepted, you need the seller's estate agent to:
- confirm that the property has been taken off the market and that all marketing activity will cease
- put a 'Sold STC' sticker on the for sale sign
- update the particulars in the agents shop window to 'Sold STC"
- update the details on the property portals to 'Sold STC"
If the property has been taken off the market, further offers are less likely.
Accept an offer from a chain free buyer
Property chains lead to delays. Accepting an offer from a chain free buyer is preferable - it is perhaps even worth accepting a lower offer on this basis.
The same could be said of a cash buyer. If you can accept an offer from a buyer who does not need a mortgage, this too can reduce delays.
Reduce delays in the conveyancing process
Delays in the conveyancing process are the enemy - the longer the conveyancing process takes, the more time there is for another buyer to make an offer.
Read more about: How to speed up the conveyancing process
Keep in regular contact with your agent and solicitor
You want to exchange contracts as soon as you can to avoid being gazumped, so don’t be passive. Keep the pressure on your estate agent and conveyancing solicitor to make the process happen quickly, and in return make sure you answer their questions and action everything you need to as swiftly as you can. Time is of the essence.
Consider home buyer’s protection insurance
Of course, it’s possible that you will do all of the above and still get gazumped. If you want to protect yourself in some measure from the money you may lose in conveyancing fees, surveys etc, you could take out home buyer’s protection insurance in advance of your house hunt.
This isn’t overly expensive – you can cover yourself from around £50 – and could help take the sting out of gazumping.
All in all, be as prepared as you can
If you want to avoid being gazumped, be as ready as you can possibly be to complete the buying process quickly. This means having your house on the market, getting your mortgage agreed in principle and having a proactive conveyancing solicitor in advance.
Once all that’s in place, you have the best chance of getting to exchange day.