No serious investor wants to be gazumped when trying to buy a property.
To help prepare you in case the worst happens, experts at regulated property buyers, GoodMove, provide their top tips on how to deal with the possibility of gazumping when buying a property.
Gazumping is, shockingly enough, a perfectly acceptable practice in which a seller accepts your offer but rejects it before the exchanging of contracts. Usually this is due to accepting another last minute, but higher offer and means a buyer is completely back where they started having wasted a lot of time and money.
So, what can a potential investor do to try prevent this from happening?
Ross Counsell, director at GoodMove offers four helpful tips on how to minimise the risk of gazumping when buying a home, plus top tips on dealing with it if it happens to you:
Find help in advance
As anyone who has gone through the process before knows, finding the right conveyancer, solicitor, and surveyor can take a while so it’s wise to get this all sorted out as soon as possible. You can start by asking friends and family about who they’ve used in the past as well as checking reviews online. Don’t forget that you’ll need to factor in conveyancing fees too.
Mortgage in principle
Before even making an offer on a home you should have your mortgage in principle ready. While this isn’t a confirmed mortgage, it does help to speed up the process as the seller and estate agent can see you have a plan in place for the funds.
Ask the seller to take their home off the market
Another way you can try and avoid gazumping is by asking the seller to take their home off the market as part of your offer. Of course, this is not guaranteed, but it will lessen the chances of other people making offers. Since this is a fairly standard practice, sellers are usually happy to do so and if they’re not then perhaps this could be a red flag.
A less common way of avoiding the chance of gazumping is with a lock-in agreement. This is a binding agreement which prevents a seller from negotiating with any other parties, although it is worth noting that some sellers can be wary about signing them. It can be quite a complicated process requiring both buyer and seller to put a sizeable deposit down, but it might be worth the hassle if you’re particularly worried.
How to deal with gazumping
It probably goes without saying that trying to avoid being gazumped is a lot easier said than done, so what can you do if you find yourself in the unfortunate situation?
Gazump your gazumper
It may seem obvious but before buying any home or making any further offers you should make sure you can really afford it. One way in which you can try to secure the property back after being gazumped is with a higher offer – just be cautious that this could result in a bidding war.
In the end it might just come down to having to prove why you’re a better candidate. Perhaps you’re paying for the house in cash, you’re flexible on moving dates, or maybe you aren’t part of a chain. Whilst the other person may have gazumped you, they might not have the edge that you do.
Ross concludes: “Whether you are a first-time buyer or an experienced buyer, gazumping is something which can happen to anyone. Unfortunately, it is an extremely common problem buyers face, but there are things you can do in order to minimize the risk and we hope our tips will help anyone buying a home to be prepared and help avoid being gazumped.”