What is gazumping and how can you prevent it?
Buying a home can be stressful, but getting gazumped makes it even worse. Most people have heard the term but are not sure what it actually means or how it works. Understanding what it means to be gazumped and what you can do to avoid it will make the homebuying process less worrying, and you may even enjoy it!
What is gazumping?
Gazumping is when a buyer makes a higher offer on a property that another person is already in the process of buying. If you have had an offer on a home accepted but someone comes along and offers more so that you lose the property, you have been gazumped.
Sometimes, the rival bidder does not even offer more money, but they are a more attractive purchaser because they can complete the sale quicker. This can happen if they are not in a property chain, for example.
When does gazumping happen most often?
According to the BBC News, house prices are now on the rise again. Sadly, gazumping is more common in a seller’s market. This is when property prices are consistently rising. The race to secure a suitable home becomes more frantic and people resort to unpleasant tactics to get what they want.
At times like this, you need a one stop shop for news and information in the housing market so that you can navigate it safely. Information such as that provided at https://www.samconveyancing.co.uk/news will help you stay up to date on the latest market developments.
You can be gazumped at any stage of the purchasing process, right up until the point when you exchange contracts.
Does gazumping cost you money?
Yes, it can do but it depends on what stage of the purchase process it happens at. If it happens early on, you may not lose much money. However, if you have already paid for things such as surveys and solicitor’s fees, it can cost you hundreds of pounds or even more.
Is gazumping illegal?
Unfortunately, gazumping is legal. The person who gazumped you has not broken any laws and neither has the person selling the property. This is because there is no legally binding agreement until contracts are signed. However, gazumping is not considered ethical.
Can you avoid getting gazumped?
Whilst it is not possible to avoid it altogether, there are some things that you can do to reduce the risk. By getting an Agreement in Principle from a mortgage provider, you will be in a position to proceed with the purchase quickly. Arranging all the paperwork and surveys promptly will also help. You can also purchase home buyers protection insurance.
