The property market in the UK can be a whirlwind of excitement and stress.
As a buyer, having your offer accepted might feel like the perfect moment to open the bubbles and start planning your new home decor.
However, it’s important to remember that the journey isn’t over yet.
Keep reading to find out what gazumping is, how it can derail your plans, and what steps you can take to avoid it.
What is gazumping?
Gazumping is when a seller accepts a higher offer from another buyer after initially agreeing to sell the property to you.
In the UK, the sale of a property is not legally binding until contracts are exchanged. This means the seller is free to change their mind, leaving you out of pocket and without the home you thought was yours.
For example, imagine you’ve made an offer on a house and the seller has accepted. You’re in the process of arranging surveys and finalising mortgage details when another buyer swoops in with a better offer. The seller then reneges on their agreement with you, choosing the new offer instead.
This is the essence of gazumping.
Why does gazumping happen in the UK?
The gazumping phenomenon is particularly common in competitive housing markets. Factors contributing to gazumping include:
- Rising property prices: Sellers may be tempted to accept a higher offer if the market is booming.
- Lack of legal binding: Until contracts are exchanged, either party can back out of a sale without legal repercussions.
- Delays in the process: If there’s a significant delay on your end, such as arranging a mortgage or completing surveys, the seller might entertain other offers.
How can you avoid gazumping?
Although gazumping is a legal practice in the UK, there are steps you can take to reduce your risk:
1. Get a mortgage agreement in principle
Having a mortgage agreement in principle shows sellers that you are serious and financially prepared. This can speed up the buying process, reducing the chance of being gazumped.
2. Request the property be taken off the market
Once your offer is accepted, ask the seller to take the property off the market. While this isn’t legally binding, it discourages other buyers from making offers.
3. Stay in regular contact with the seller and estate agent
Maintain clear communication with the seller and their estate agent to keep the process moving swiftly and to demonstrate your commitment to the purchase.
4. Invest in home buyer’s insurance
Home buyer’s insurance can cover some of the costs incurred if the sale falls through due to gazumping.
5. Work with a reputable estate agent
Choose an experienced estate agent, like Stapleton Derby, who understands the local property market and can guide you through the process. A good agent will negotiate on your behalf and help you minimise the risk of being gazumped.
6. Exchange contracts quickly
The sooner you can exchange contracts, the sooner the sale becomes legally binding, reducing the likelihood of gazumping.
What to do if you are gazumped
Despite your best efforts, gazumping can still happen. If you find yourself in this situation, here’s what you can do:
- Appeal to the seller: Share your position and try to convince the seller to honour the initial agreement.
- Match the new offer: If possible, you could consider increasing your offer to match the competing bid.
- Cut your losses: Sometimes, walking away and finding another property is the best option to avoid further financial strain.
Avoid gazumping with Stapleton Derby
At Stapleton Derby, we understand the frustration that gazumping can cause. Our experienced team is here to guide you through the property-buying process, ensuring you feel confident every step of the way.
Whether you’re buying your first home or adding to your property portfolio, working with an estate agent you can trust is key to minimising risks like gazumping.
Contact us today to learn more about our property services and how we can help you find your dream home. Either call 01744 883 322 or send an email to info@stapletonderby.co.uk for professional advice and assistance.
