If you’re in the process of purchasing your next home, you know how long and hard your trek can be. If your offer price has been accepted, when solicitors are instructed, there’s such a lot that can go wrong before contracts are exchanged – gazumping being one example. The number of people buying a new home who are gazumped is likely to increase as the home-buying market in the UK grows, it is suggested.
A study by finance provider MFS, conducted in 2020, found 31% of UK homeowners (those who purchased a home in the past 10 years) had been a victim of gazumping and lost out on a home purchase as a result — 47% of you live in Wimbledon London.
Now we’re going to take a closer at the dreaded practice and how you can keep it from destroying your opportunity.
What is Gazumping?
Gazumping is when a seller accepts an oral offer on the property (acceptance of sale) from one potential buyer and then accepts a higher offer from someone else. The result is that the property is sold to someone different and the first buyer is left high and dry because their verbal agreement is not enforceable. They accept this offer and sell it to the other buyer.
Cost of being Gazumped
The victim is left with nothing but costs in legal and surveyor fees plus wasted time.
Reasons for Gazumping
There are several reasons why a buyer may get gazumped. The vendor may suddenly realise they can get a better price so they decides to sell to another buyer who has offered more money.
Your solicitor may not have been contacting the seller’s solicitor quickly enough and the seller has found another buyer who can move a lot more quickly.
Is a Gazump legal?
You might think gazumping is a sharp practice, but it is legal. As soon as your offer is accepted, the property is deemed ‘sold subject to contract’ (SSTC). The legal bit comes when contracts are exchanged. Until the contracts are exchanged, however, you are at risk of being gazumped as a buyer.
When does Gazumping happen?
Gazumping can become a very frustrating and costly part of the house-buying process as it usually takes place quite far along even when exchanging contracts, the mortgage has been agreed upon, survey findings are back and any local searches and questions have been made.
What Precautions should Buyers take to avoid being Gazumped?
Ask for Marketing to stop
Estate agents are legally compelled to put your offer to the vendor so the first and most important thing you need to do is get it taken off the market. Make it a condition of your offer that all marketing and advertising is ceased with immediate effect. If no one else gets to see the property, the chances of someone else offering more than you and buying it from under you are hugely reduced.
Have a Mortgage in place
Once an offer is accepted, it is assumed that both the buyer and seller want to move quickly with the sale. As the buyer, it is in your best interest to be ready and prepared to proceed. This would include having a mortgage in principle in place, a solicitor ready to start the conveyancing work and all necessary household documents to hand. This will help to prevent any unnecessary hold-ups which could cause the sale to go pear-shaped.
Appoint a Surveyor
The next step is to appoint a surveyor and arrange for an inspection visit. The surveyors are RICS-accredited Chartered Surveyors and they offer a full range of RICS-endorsed home surveys. That means you can get the insight you need to help you make an informed purchase decision. The surveyors are knowledgeable in property markets in both Wimbledon London. Contact us to request a free no-obligation quote.
Move fast
Keep things moving as swiftly as possible in this period and do whatever you can to ensure any survey or valuation is done quickly; you want to get to exchange of contracts as speedily as possible.
Stay in touch with all Parties
Make sure you are keeping in fairly frequent contact with your mortgage provider and your conveyancing solicitor so any requests for information can be responded to quickly. Also, keep the estate agent in the loop; it’s in their interests to keep pressure on the seller too!
Build rapport with the Seller
Another thing worth doing is to build a good rapport with the seller. The formal sale will be carried out by the solicitors, while the estate agent offers a useful go-between, and it’s probably best to keep it at that. However, there’s no harm in making sure you have a direct line of communication with the seller. That way, you can keep them updated on where you are, and the seller will see that you are doing everything you can to move the process forward. You never know, they may feel more inclined to honour the deal with you. However, this is not for everyone – some buyers would rather remain within arm’s length of the seller.
Get Home Buyer Protection Insurance
Do you know you can get home buyer protection insurance to protect you against a house sale falling through? There may be nothing much you can do about a sudden seller’s change of mind and accepting another offer, but at least you can claim back some of your abortive sale losses, such as your conveyancing fees, survey fees or any other expenditure related to an abortive sale!
The team has been helping home buyers in Wimbledon London and the Home Counties for many years, so you can rest assured that they will help you get the most out of your property purchase. Just contact us for more information; we’d be glad to hear from you.
