What The Heck Is Gazumping?
Gazumping is something that no buyer particularly wants to come across when purchasing a property. Why? Dive in to know more.
Gazumping is something that no buyer particularly wants to come across when purchasing a property. The strange sounding term refers to the strange situation whereby a seller can pull out of an agreement to sell their property and accept a higher offer. As a leading property law firm, we understand that this can be very disappointing. Currently this is a legal right of sellers, however there are ways you can protect yourself from this happening. Let’s dive into what the heck gazumping is, why it happens and how to avoid it.
What Does Gazumping Mean?
Gazumping is whereby a seller pulls out of an agreement to sell their home to one buyer as they have received a higher offer from another. For example you agree to buy a property for £200,000. You proceed with the sale. Two weeks in, the seller gets an offer of £220,000 and decides to proceed with the new buyer. This, as disappointing as it may be, is a legal right of the seller until contracts have been exchanged. Gazumping is quite common in the UK and being aware of the fact this can happen could actually help you. Understanding what causes gazumping and how to avoid it sets you up in the strongest position to begin the buying process.
Why Does Gazumping Happen?
There are a few reasons why gazumping happens in the UK. This list is by no means exhaustive however these are a few common causes of a seller switching buyers;
1. The New Buyer Can Proceed More Quickly
If the new buyer is chain-free and has their finances in place;
- either by having a mortgage offer in place or
- being able to purchase with cash,
a seller may be persuaded to go for a quicker sale. This could be due to their personal circumstances if they need to buy another home or move quickly.
2. The Sale Has Gone Stale
If after a sale is agreed there is a lack of communication between the agents or the buyer and seller, the seller can get anxious and consider other offers.
3. Slow Conveyancing
When solicitors are instructed, a sale can start processing very quickly. However, if there is no urgency with the conveyancing, a seller can get frustrated and pull out of the deal. Ideally you want a conveyancing solicitor to start searches and work as quickly as possible to proceed to exchange contracts.
4. They Simply Want A Higher Offer
In some cases, the seller simply wants to accept a higher offer. In this situation unless you can match the higher offer it can be difficult to continue with the purchase.
Although the above may sound discouraging, the good news is there are ways that you can protect yourself from being gazumped in the UK. Ready to get your armour?
How Can You Protect Yourself From Gazumping?
Gazumping is currently legal in the UK, it refers to the situation whereby a seller can accept a higher offer from a new buyer after they have already agreed a sale. They have the right to do this until the point you have exchanged contracts. To avoid this frustration we have a few tips to protect yourself;
1. Have Your Finances In Place
One of the main reasons for gazumping is a new buyer being able to proceed more quickly. Having your finances in place can reassure the seller and prevent any delays.
2. Get Surveys Booked Promptly
Make sure you get your property survey booked as promptly as possible to keep things moving. The sooner this is done, the sooner the transaction can proceed to exchange and the less time you have to be gazumped by another offer.
3. Have A Speedy Solicitor Ready To Instruct
Slow conveyancing can be a big cause of gazumping and fall throughs in property sales. Having an experienced property solicitor on speed dial can ensure you proceed to exchange as quickly as possible. At Waterstone Legal we offer a fast-track service to expedite urgent transactions.
4. Keep Communication Flowing
Check in regularly with your agent and conveyancer to ensure communication flows freely and the seller is constantly updated with the status of the transaction. Make sure your conveyancer keeps in regular contact with the seller’s conveyancer so that there are no delays.
The Wrap Up
Gazumping is a frustrating legal situation in the UK whereby a seller accepts a higher offer after they have agreed a sale. This can happen where the new buyer is in a better position to complete the sale, there is a lack of communication or slow conveyancing. To protect yourself from gazumping, Waterstone Legal offers a fast-track service to expedite your conveyancing. You can also make sure your finances are in place and you keep in regular communication with all parties till you exchange contracts. Then sigh with relief, you are nearly there!
This article is general information, not legal advice. For advice on your own matter, make an enquiry — it's free and confidential.