One of the most exciting moments in a property transaction is when a buyer’s offer is accepted. However, for thousands of property purchasers, the reality of being gazumped can derail their transactions completely. Gazumping is the term used to describe a seller changing their mind after accepting an offer. Specifically, in favour of a higher offer from another buyer at the last minute. This leaves the original buyer devastated, having to re-start their search for a new property. However, gazumping is completely legal and is on the rise throughout England and Wales again.
What causes a buyer to be gazumped?
As every transaction is different, there are a number of reasons why a seller may change their minds. The most common is being tempted by more money. Another is if the new buyer is in a better position to complete quickly, such as a first-time buyer instead of someone in a chain. It can also be a result of the seller feeling concerned that the transaction could fall through, or it is not moving quickly enough.
Can you reduce the risk of being gazumped?
The short answer is yes! Understandably, the thought of being gazumped is unsettling but there are steps to take to reduce the risk. While it is important to remember that there are no guarantees, these tips can help keep your transaction on track.
- Remove the property from the market quickly
It might seem obvious for an estate agent to remove a property from the market as soon as an offer is accepted. However, it does not always happen as quickly as you might think. Making sure this is done will prevent new prospective purchases from viewing the property and making higher offers.
- Get prepared before making an offer
Prepare some of the key elements in advance to put yourself in a stronger position. Obtaining a mortgage in principle and having a conveyancing lawyer ready to instruct are great ways of doing this. They allow your transaction to begin quickly and efficiently, to reassure both yourself and the seller.
- Do your parts as soon as you can
Prevent your vendor from losing confidence in the transaction by doing what you can to avoid causing unnecessary delays. Things like completing your paperwork early and ordering searches as soon as possible can really help. Especially in a busy market, completing your parts promptly can be a great help.
- Get to know your seller better
You may not think of it at first, but it is a good idea to bond with your seller. By getting to know them and communicating regularly, they can be more understanding if they are kept in the loop. This can also make them more lenient towards delays, which can occur through no fault of your own.
- Put an exclusivity agreement in place
Consider putting an exclusivity agreement in place with your seller. Essentially, it means they agree not to accept or seek alternative offers for a set period of time. Although the seller may not agree, some think it shows that the buyer is serious about the purchase. Meaning the seller has more confidence in the transaction.
Help to protect yourself from gazumping with these tips!
Remember that there are no guarantees to protect yourself from being gazumped. Ultimately, while there are now laws against it, the decision remains with the seller. However, by understanding the gazumping process and following our tips, the risk can be reduced. There are many things you can do to strengthen your position when buying a property. Not only can they help reduce your chance of getting gazumped, they can also help to ensure your transaction goes smoothly.
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