If you’ve had your offer accepted on your dream home, you’re no doubt excited. But even after agreeing a deal, the home buying process isn’t always plain sailing.
Gazumping is where a seller accepts an offer on their property, only to reject it later in favour of an offer from someone else.
It can happen several weeks or even months down the line. And it often occurs when a seller is handed a higher offer.
Unless the original buyer can get their agreement back on track, they're likely to have wasted time and money spent preparing to buy the property.
This could include getting a property survey done and carrying out local searches.
And they’ll have to start their property search all over again.
It can be very disappointing, as buyers who have been gazumped will testify.
Is gazumping legal?
Gazumping is completely legal. And you can be gazumped at any point up until the contracts are exchanged.
That’s when your agreement with the seller becomes legally binding.
How to avoid being gazumped
The good news is that there are steps you can take to reduce the risk of getting gazumped.
1. Be organised
It’s a good idea to line up professionals, such as a surveyor, mortgage broker and solicitor, in advance. And have all the necessary documentation to hand, including the required ID.
Make sure your finances are in place. If you need a mortgage, get a mortgage agreement in principle.
This is essentially a letter from a mortgage provider setting out how much they would be willing to lend, based on an initial assessment of your circumstances.
If you're selling at the same time as buying, get your property on the market.
Better still, get an offer on your home before making an offer on the one you want to buy to reduce delays in the chain.
2. Ask the seller to take the property off the market
When striking an agreement with the seller, ask them to take the property off the market. It'll help reduce the risk of the property attracting attention from other buyers.
The seller is not obliged to do this but you may want to question their reasons if they say no.
Make sure this request is done in writing so you have a record of it.
3. Build up a rapport with the seller
Take the time to get to know the seller and show them that you’re a serious buyer with your heart set on their property.
It could mean that there's less chance of them dropping you at the last minute for another offer.
4. Request an exclusivity agreement
Think about asking the seller for an exclusivity agreement, otherwise known as a lock-out agreement.
This is where the seller agrees not to seek, or accept, offers from other buyers for a certain period of time.
It'll give you breathing space to get ahead with some of the tasks associated with buying the property.
This could include organising a property survey and finalising mortgage arrangements.
Speak to your solicitor to find out more.
5. Keep things moving
Do all you can to keep the buying process moving swiftly. The shorter the time between striking an agreement and exchanging contracts, the less likely it is the deal will fall through.
Stay in regular contact with everyone involved in the process, such as your solicitor, mortgage broker and surveyor. And make sure you read, sign and return forms as promptly as possible.
6. Take out specialist insurance
Consider getting Home Buyers Protection Insurance.
You can buy it as soon as you've had your offer accepted.
While it won’t reduce the risk of getting gazumped, it's designed to cover you for the loss of expenses you’ve forked out for while preparing to buy the property.
Surveys, legal fees and mortgage arrangement fees can run into thousands of pounds, so it's definitely worth thinking about.
Make sure you read the policy small print.
7. Consider buying at auction
You could buy at auction to avoid the conventional home buying process – and the risk of gazumping that comes with it.
Property auctions can be a good way to buy a home quickly and potentially bag a bargain.
But they do come with different risks so it’s important to weigh up the pros and cons first.
What to do if you are gazumped
If the unthinkable has happened and you've been gazumped, here's what to do.
If you’ve still got your heart set on the property, you could try and persuade the seller to reconsider their position.
Find out what their motives are for selling and show them why you’re the best buyer for their property. It could be that you’re a cash buyer or you can move quickly.
You could consider putting in a higher offer. But remember you could be gazumped once again.
Alternatively, you may want to withdraw from the running and search for a different home to buy.