A vendor (seller) has accepted an offer on their property – Subject to contract, but then someone else makes a better offer to which the vendor accepts, and the initial offer is then rejected.
Most vendors are looking to achieve the best price. So, they may accept an offer that a prospective buyer has made quickly. But the gazumping offer may then be accepted because:
i) they are in a better position
ii) can move quicker and are a cash buyer
iii) the offer is higher than the initial offer
iv) the new offer is not in a chain
v) or a mixture of all the above.
It is an unfair and stressful process but there is no law in England and Wales…at the moment, that stops this happening. Buying a house is a legal contract and a contract is not fulfilled until all contracts are signed and exchanged by both parties.
Estate Agents are bound by law to pass on to their client any offers that are made for purchase of their property whether they have accepted an offer or not.
The Government are addressing the situation of Gazumping and other tactics that cause so much distress to participants of the buying and selling of properties. But it would seem to be on the back burner as they focus on other priorities at the moment.
Having all your ducks in a row theoretically will enable you to act quickly to secure a sale. Do some research and approach any professionals that you think you may need before you make any offer, so they are in place and can get things like surveys and searches done quickly. The quicker you satisfy your issues with the property the less time there is for gazumping.
The biggest effort will be to get a mortgage in principle in place before you do any viewings. This is an agreement with a mortgage lender that they will ‘in principle’ loan you a specific amount of money to be able to buy a property, although there are conditions that will be put in place before any lender agrees to this.
Contacting a Conveyancer (Solicitor specialising in property transactions) to forewarn them that you are in the process of viewing properties at the moment and will be instructing them in the future. This will help to speed up the process. Again, having a Surveyor in mind will be a benefit when you need to contact them. Conveyancers and Surveyors are best instructed through word of mouth. Although, one person’s experience will never reflect someone else’s. Always ask around friends, family or work colleagues for their personal experiences and opinions.
My advice … the main aspect of making sure you are not gazumped would be to make an offer with the condition that all marketing stops on the property, and it is taken off the market immediately with no further viewings. Some vendors, dependent on your situation would readily agree to this. But in most circumstances any offer is subject to contract and that you, the prospective buyer can prove your financial position, hence mortgage in principle and enough funds available for your deposit. The quicker you prove this, the quicker the property will be taken off the market and no further marketing should take place.
Prior preparation and research are the key to unlocking your future home!
I have just sold my house through Harrison Thorn and can't praise them enough. John and Debbie are amazing, they are extremely good at what they do, very professional. They kept me informed and up-to-date with the process. Always on the end of the phone whenever I had questions or needing advice with the purchase of my new home. I would recommend them to everyone, and have!!
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