Gazumping. What does it really mean and how can you avoid it?
After months of property searching and finding the perfect home, getting an offer accepted can be just the start.
While the excitement of having your offer accepted may get you carried away with interior design ideas, decorating plans and preparation for the big move, unless you've got the keys in your hand there is something to bear in mind.
What is Gazumping?
This is when another seller comes along and places a higher offer than yours, even when yours has been accepted. Unfortunately, in England and Wales, there's no law against a seller accepting an offer from someone else even after they've accepted yours.
Whether it's on the day you've had the offer accepted or later on in the buying process, gazumping can happen at any point until contracts have been exchanged.
How do you minimise the risk of being gazumped?
Being gazumped isn't fun for anyone but to help avoid another seller topping your offer, here are a few things you can do.
Make your offer conditional on the property being taken off the market. This will minimise the danger of being gazumped and while the request may not be accepted, it will demonstrate how serious you are and also give you a warning that the sellers may continue to hold out for a higher price giving you time to withdraw and look elsewhere.
Finalise Fast - Sellers will want the property sale to go through quickly. The sooner your mortgage approval is complete and the surveys are done etc, the sooner the contracts will be exchanged.
Be Prepared - It's ideal to have your 'Mortgage in Principle' ready and conveyancers arranged before putting in your offer. If you have a current property to sell, make sure it's on the market and preferably only make an offer once you've accepted an offer on your current property.
Show Enthusiasm - If the seller knows how keen you are to get the sale pushed through; it might sway them away from other offers. They will want the process to be completed soon. The estate agent is usually the one representing the seller, but once an offer has been accepted, make sure the sellers know that you're excited about buying their home and that you mean business.
Already Been Gazumped?
Of course, you will be very frustrated but now is the time to try new tactics.
First things first, don't get carried away. It's important to know where you stand financially, otherwise this could affect you later down the line. Work out the maximum price that you can afford and stick to it. Remember, if you come up with a higher counteroffer, there's still a chance that you could be outbid again. You'll need to draw a line somewhere.
Highlight the advantages of dealing with you. Are you a first time buyer? No chain? This will mean that the purchase could go through faster and also make your offer more attractive to the sellers. You might also be flexible with dates and able to accommodate a schedule that works better for the seller.
If you or someone you know is looking for advice on their first/next mortgage - get in touch, we'd love to hear from you!
