A flurry of recent reports and research suggest that the heated UK property market is seeing the return of gazumping, so what is it and how can you avoid losing out on your dream home purchase?
Gazumping is the term used to describe what happens when a vendor accepts a verbal offer for their property but then agrees to a better offer before contracts are exchanged on the first bid. If you are gazumped, you not only lose your potential purchase but may well lose the money you have spent on the professional fees and searches which make up a part of your conveyancing costs.
If you are not sure what these outgoings are, you can find details on these costs by looking at conveyancing costs online.
No Problem with the Practice
It is estimated that this year gazumping was responsible for 38% of deals falling through, and it seems this trend is likely to continue, with 75% of potential buyers saying they saw no problem with the practice and would happily gazump a rival for a property.
So is this practice legal? Yes, unfortunately it is because until contracts are exchanged there is no binding agreement between the parties. As most people who have ever bought a property know, the pace of the process can be glacial, and it can be many weeks after a verbal agreement before contracts are actually signed.
It is not always the case that you have been gazumped by a larger offer: it may be that your rival has a mortgage agreed and you do not, and the vendor may feel they can move forward quicker with someone who has funds in place. The lesson here is to get your ducks in a row as soon as possible.
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How Can You Avoid Being Gazumped?
The answer to this is to act quickly and sensibly before you put in your offer. You will have to have a conveyancer in place, a surveyor to look at the property under offer and a mortgage offer. You should aim to line these up before making an offer.
Look for a local conveyancer who will carry out the legal aspects of the purchase for you. Get a few quotes to make sure you have the best deal.
Follow the same process for appointing a surveyor so that they too can move quickly once the property is under offer.
Perhaps the most important thing is to have a mortgage in principle in place from a lender. This is not to be seen as a mortgage offer, but it will re-assure the vendor and mean that the whole process is speeded up.
Finally, keep the vendor up to date with your position.