What is ‘gazumping’?
‘Gazumping’ is a word often used in the property market when an offer has been made by one buyer, and accepted by the seller, but before the sale is finalised, the seller then accepts an offer from another buyer. The original buyer is then forced to either drop out or compete with the new price. Sometimes the new buyer ends up dropping out, and so you can win back the property that way, although this is by no means something to rely on.
‘Z’ is thought to be the least common letter in English language usage, so any unfamiliar word bearing this lighting-strike consonant, may pique interest. Not to be confused with its opposite ‘gazundering’, where the buyer demands a better price, or ‘gazanging’ where the seller gets cold feet. Gazumping is one of the many potential hurdles to investing in a property or buying a home. The UK housing market is currently booming, meaning that gazumping is back, and unfortunately, until both parties have signed on the dotted line, there’s a limit to what you can do. Gazumping may be considered bad manners in England and Wales, but it is prohibited completely in Scotland.
For those who have already fallen in love with their soon-to-be property, gazumping can be a painful experience. Until contracts have been signed nothing is legally binding and you can also lose out on the money you paid on legal and survey fees.
Are there different kinds of gazumping?
There are several branches of gazumping. In some cases the seller actually accepts more than one offer and, it’s very simply, a race to get all the paperwork in order, with the first to sign the contracts ‘winning' the property. You should be informed by a lawyer if you are in a contract race.
Can you protect yourself from gazumping?
There are many ways to help prevent the property you’re purchasing from being gazumped, including asking for the property to be taken off the market once your offer has been accepted, and making sure to get this in writing.
You could also ask for a contract to make sure that the seller won’t consider any other offers for a certain amount of time, then if they agreed to this in writing, and the sale still fell through at their end, you could take legal action against them. These are known as lockout agreements. These agreements are not common practice, will cost money, and many people just sit tight and hope for the best.
The quicker contracts are exchanged the less time there is for other offers to be made, although you will need to make sure that you don’t make any rash decisions when it comes to choosing your property and ensuring you know if there are any problems with the property. If you make sure you keep the seller and estate agent informed then this can also reassure them that the sale will go through as planned, which might make them less likely to lean towards another buyer.
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