With the market for buyers difficult due to a shortage of available properties and a large number of people wishing to move, tales of gazumping are rife. We take a look at how to minimise the risk of being gazumped and what to do if it happens to you.
Gazumping happens when you have had an offer accepted on a property but while you are going through the conveyancing process the seller pulls out of the deal and accepts a higher offer from someone else. It is completely legal for a seller to do this at any stage before exchange of contracts. There are some steps you can take to reduce the risk of being gazumped, as follows:
Obtain a mortgage in principle
If you will need a mortgage in order to buy the property, then arrange this straight away. You can ask your lender to provide an offer in principle, which is a mortgage offer that is not tied to any specific property. Once you have found somewhere to buy, it is a simple matter of advising them of the address and price, with all the approval work already done.
Instruct a solicitor upfront
By asking a solicitor to represent you as soon as you decide to move, you will have the relevant details to hand to pass on to the estate agent the minute your offer is accepted. This is a good way to demonstrate that you are a serious buyer. It will also allow the solicitor to start work on opening a file and verifying your identification, which will need to be done before contracts are exchanged.
Have your own sale in place
If you are also tying in a sale, it is a good idea to find a buyer yourself as soon as you can. In a hot market, your buyer is likely
to be prepared to wait for you to find a property to buy if there are fewer properties available for them to transfer to.
If you are selling, again you should instruct a solicitor without delay so that they can start putting together the contract package. They will let you have the pre-contract enquiries to reply to as well as a list of other documents that will be needed such as copies of guarantees and certificates.
Ask the seller if they will remove the property from the market
As a sign of good faith, you can ask the seller if they will take their property off of the market so that it no longer appears in the estate agent’s listings. This will reduce the opportunity for another potential buyer to gazump you.
Ask for a lock-in agreement
Occasionally a seller will agree to sign a lock-in agreement, which is a legally binding agreement stopping a seller from negotiating with anyone else for a set period.
Dealing with gazumping
You may be able to match or outbid the gazumper, but you should ensure you can realistically afford the increased price.
Alternatively, you may be able to appeal to the seller by setting out reasons why you are a better candidate. For example, if you are able to proceed without delay, either because you are not in a chain or because you already have a buyer for your home and a mortgage offer in place, they may decide to stick with you.
If you would like to speak to one of our expert property lawyers, ring us on 0333 305 5189 or email us at info@lpropertylawyers.co.uk
