Save yourself money and avoid being gazumped
Guest post by Jayne Robertson
In the world of property-buying, there are few things more disheartening than being gazumped. Once your offer has been accepted by the seller it may seem as though nothing can stand in the way of the sale going through. Unfortunately, however, it is perfectly legal for another bidder to come in with a higher offer, thus gazumping your offer.
Although not necessarily encouraged, gazumping is perfectly legal since the agent is required by law to present all offers to the seller in writing. While there are no fail-safe methods to ensure that you will not be gazumped, there are some tried-and-tested ways that mean that you are less likely to be gazumped after making an offer on the property of your dreams.
In this article, we will explore the things you can do to avoid being gazumped. Also, check out this Wikipedia article for further information on gazumping.
Five key ways to avoid being gazumped
Get all your ducks in a row – this means being organised and making sure you have all your paperwork in place prior to making an offer. Getting a mortgage in principle is necessary as having an agreement in advance of making an offer will make the process quicker and smoother than having to start from scratch after making an offer. Also, when your offer is successful you should ask if the property can be removed from the market as soon as possible to minimise the number of eyes that will see the property’s listing after your offer has been accepted
Check in regularly to keep the process moving forward – it’s true that the process of buying property can be rather drawn out, especially when there are complications that need to be addressed. By regularly checking in with the agents and your solicitor you can make sure that you keep the process on track and keep things moving quickly.
Make sure that the sellers know that you are serious – this could be the difference between a seller accepting your offer or wavering and accepting a higher offer from another party. It could be advantageous to ensure that the seller knows if, for example, you are not part of a chain, or that you are very flexible and willing to work with them to reach an agreement on a moving date. Maintaining a friendly relationship with the vendors may be highly beneficial in gaining protection from being gazumped.
Get a lock-out agreement – a lock-out agreement or exclusivity agreement can be helpful in showing the vendor how serious you are about completing the purchase. However, you should bear in mind that the seller is under no obligation to sign this. In reality, an agreement to sell or buy is not legally binding until the contracts are signed and exchanged.
Consider legal protection – Home Buyers Protection insurance can provide protection from any costs you had incurred before being gazumped. This includes any legal fees, costs of surveys, and the cost of mortgage lending. While obtaining legal protection will not actually prevent you from being gazumped, it will certainly mitigate some of the frustration of your offer being turned down.
Alternative ways to avoid being gazumped
Although these tips are sound advice for those looking to minimise their chances of being gazumped, the unfortunate truth is that gazumping is legal, and so there is always the possibility of your vendors accepting a higher offer.
If you are unwilling to go through the emotional turmoil of being gazumped there are some ways to nix the possibility altogether.
Buying at auction is one way to make a quick purchase. However, make sure to do your research as you will undoubtedly be up against very experienced investors. Being fully prepared is absolutely vital if you are considering buying at auction.
Furthermore, buying a new build property is another way to avoid being gazumped as you will be paying a housebuilder directly rather than another homeowner who may be tempted by a higher offer. Narrowing your search to include only fixed price properties is another strategy as this might indicate that the homeowner is looking for a quick sell, and will settle for a reasonable sum rather than holding out for the highest possible offer.
Buying and selling properties doesn’t have to be a fraught, drawn-out process. For those looking for a hassle-free sale of their home, LDN Properties can offer a direct and reliable sale in the UK. By selling to a cash buyer you can be in a stronger buying position when considering your next property purchase, thus reducing the risk of being gazumped.
To sum up, if you are looking to buy and are worried about being gazumped follow these sensible tips to minimise the chances of your offer being rejected in favour of a higher bid. Although there are no guarantees, by following these methods, you may find yourself in the home of your dreams sooner rather than later.