You may have heard the term ‘gazumping’ spoke from an estate agent, but wondered what it could actually mean to you as a buyer or a seller of property. As a general term gazumping is when a buyer has an offer in on a property, the buyer has paid for surveys and someone else come along with a higher offer to try and outbid that buyer. The original buyer then loses out on fees paid to surveyors and or solicitors.
It is most common for property buyers (just ask Top Cash Offer) to blame the estate agent for gazumping, but in actual fact all estate agents by law must pass every offer they receive on a property across to the seller. Any seller who isn’t in desperate need to sell a house quickly would always take a higher offer over a lower one. However, if the second bidder is not as serious as the first, a seller may be losing out on a potential sale and have to relist on the open market. It is a chance that all sellers take when considering a gazumped offer.
If you are currently buying a property we can give you a few tips that will help you stop getting gazumped, however please be prepared for it happening. Especially in a rising market like the one we are in now. There are more buyers than there are properties available for sale.
Tip 1. Make sure your mortgage is lined up and ready. Don’t wait until you find a property that you like before starting the mortgage application process. Ideally you should have a mortgage in principle already in place before you start bidding, and should have you application all in place.
Tip 2. Have your solicitor on standby. Make sure you choose a quick solicitor, and get them to perform any routine paperwork before you offer on any property.
Tip 3. Get the agent to remove the property. Usually once an offer has been agreed you can request that the buyer and agent remove the property from the open market. This means it is far less likely for anyone to actually find it. This rule doesn’t apply if the property you are buying is a public notice repossession property.
If you are in a position whereby you have been gazumped, don’t panic. Just remember there are hundreds of properties on the market, and it’s better to lose a few hundred pounds than it is to regret an overpriced offer made on a property.