Gazumping: What Is It?
Imagine you’ve finally reached the point where your years (or decades) of hard work are leaving you with more money than you ever hoped for.
And this means that it’s time to finally move and upgrade to a bigger and better home—or, if you’re already happy with where you live, this can signify that it’s time to invest in property.
Thanks to the fact that the internet exists, you can finally get straight to house hunting and immediately pool together an assortment of options that fit your budget and needs. Among the different listings that you’ve come across, however, there’s one special option that catches your eye—making it clear that you now have your “perfect” listing and the time to act is now.
Not one to pass up on a great opportunity, you pick up your phone and contact the seller or seller’s agent that posted the listing you’re looking to get right into negotiation. After making your interest clear and haggling for a good price, everything moves along smoothly and now you’re on the cusp of closing the deal.
But then the unthinkable happens: the seller tells you the deal is off because someone else offered a higher price than you did—you’ve just been “gazumped”.
What Is Gazumping?
If this is the first time you’ve experienced gazumping or heard of it, then you’re probably wondering what it means.
Gazumping, simply put, is a term that alludes to an event wherein a seller accepts a higher offer from another buyer and subsequently cancelling a pre-existing transaction. Generally, this particular event is problematic because it leaves an original buying party exposed to paying their conveyancing costs and hunting for a new property to buy.
However, it isn’t illegal as sellers aren’t legally bound to sell or reserve their listings to a buyer until they exchange contracts. Additionally, the existence of this possibility makes it a responsibility for buyers to act as quickly as possible to save their deals in case it does happen.
How Can You Avoid It?
If you’re looking to protect yourself against being gazumped, then you’re in luck because there’s an assortment of measures that you can carry out. To give you a better idea of what you can do to ensure that you don’t end up missing out on a great opportunity that you worked hard on securing, here are some helpful tips:
Reduce The Period Between Your Offer And Exchange
One of the most effective solutions that you can use to secure a property and avoid or remedy the risk of gazumping is to reduce the time between your offer and the exchange.
Generally, reducing the gap between inquiries and closing or exchanging contractors is a great gazumper deterrent because it minimises the likelihood of other buyers coming along. And while shrinking the time difference between asking and paying can be a task that’s easier said than done, here are a few simple measures you can use to speed things up:
Choose a proper conveyancing solicitor to work with. Doing this will allow you to establish and utilise fast communication as opposed to choosing a random “professional” that will delay your process for weeks on end.
Instruct your solicitor to commence initial paperwork, ID, and protocol forms before you place your offer so that you can act fast and close a deal instantly upon acceptance.
Implement an Exclusivity Agreement With A Non-Refundable Deposit
Another proven anti-gazumping method that can work wonders when used properly is an exclusivity agreement.
With the help of a “lock-out/lock-in agreement” that can be drawn up once you put your offer in, you’ll be able to bind a seller to your agreement so they can’t accept higher offers. And although this step may slow down the conveyancing process quite a bit, it’s a perfect tool to use if you’re set on purchasing a property and holding a transaction down!
Being gazumped is arguably one of the worst experiences that homebuyers can ever go through because of the frustration that it puts them through. You can best protect yourself and your best interests by implementing the right measures to safeguard your transaction!
If you’re looking for cheap conveyancing solicitors in the UK that will help you find your dream home and secure it fast, Conveyancing Supermarket is more than happy to help. Get in touch with us today!