What is gazumping?

According to a recent survey, gazumping is still very prevalent in the UK property market, with 31 percent of buyers reportedly having at least one sale hijacked by a higher bidder. So, what are your options if you’ve found your dream home and don’t want to lose it?

what is gazumping?

So, you’ve found a property on Rightmove, had a couple of viewings with the estate agents and decided that the property is definitely for you. After a little negotiation with the owner, you have made an offer and it has been accepted, perhaps over the phone or at the estate agents. Next thing you know, your best and final offer is disregarded after the buyer has accepted a higher offer from another bidder. That’s when it’s clear you’ve been gazumped.

What is Gazumping?

Gazumping is the name used when somebody succeeds in acquiring a property after submitting a higher offer than one already accepted by the seller.

Gazumping can also happen when a seller suddenly demands a higher price on the property, after previously accepting a lower offer.

Ultimately, gazumping is a home buyer’s worst fear. They’ve found their dream home and believe they’ve secured it, only to lose it to a mystery buyer with more cash.

To make things worse, the buyer may also have invested in surveys, conveyancing and mortgage arrangement fees for the property, which are wasted if they get gazumped.

Should a gazumped victim up their offer?

A gazumped buyer may not be able to afford to up their offer, but if they can, there’s nothing to stop them doing so.

If you are thinking about upping your offer after being gazumped, it is important to consider what you’ll do if you are gazumped again. The other buyer may be determined to get their hands on the property! It can be tempting to let your heart rule your head, but it’s important to ensure any property remains a wise financial purchase. Don’t push yourself beyond what is comfortable for your budget.

Is gazumping legal?

Gazumping may be questionable from a moral perspective, but it is currently legal.

Despite the fact that gazumping is legal throughout the UK, it is far less likely to occur in Scotland. This is because homes in Scotland are sold by solicitors who are restricted by anti-gazumping rules. If a seller wishes to accept a higher offer from another buyer, they need to also instruct a new solicitor.

How to reduce your risk of being gazumped

There are a few ways you can try to reduce your risk of being gazumped. These include:

Asking for the property to be taken off the market 

Once your offer has been accepted on a property, it should be taken off the market. This should help to limit enquiries from other buyers.

Proactively chasing the estate agents for exchange of contracts 

Buying a property is a long process. This can often leave people anxious and worried that their purchase will fall through. Make sure you stay in regular communication with your estate agent and keep putting your case forward with solicitors.

Putting yourself in a best position possible

If you require a mortgage, this should be in place before putting an offer on a property. Having a mortgage agreement ‘in principle’ will show the estate agent and seller that you are serious and proceedable. If you have a property to sell, find a buyer before making an offer.

Making yourself aware of your estate agents methods 

It’s important to speak to the estate agent about how they handle gazumping. This will help you to look out for any signs that your purchase may be susceptible to falling through.

Are sealed bids a fairer option?

If there are lots of people interested in the property, estate agents will often ask for ‘best and final’ offers. This means they will ask all interested buyers to submit their highest offer by a certain deadline. The seller will then choose between between these offers, rather than having a long-winded bidding war.

When making your sealed bid, be careful not to pay over-the-odds for the property. Knowing that others are bidding can make it tempting to offer more than you would ordinarily. It’s important to ensure the offer you make it financially responsible. Doing some research on its value and similar house prices can help you decide on what to offer.

Is gazundering the same as gazumping?

The term “Gazundering” refers to a buyer who lowers their offer on a sale price that has already been agreed. Gazundering can cause an equal amount of anxiety and worry, particularly when a seller is relying on a certain amount of profit from their property sale in order to purchase their new home.

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Author:

Danny Luke

Danny Luke

As Managing Director, Danny is responsible for the overall performance of Quick Move Now and provides strategic guidance and direction to all its employees. Danny is committed to making Quick Move Now the leading and most trusted home buying company in the UK.
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