Gazumping is when the seller of a property accepts an offer from one buyer and then just before the sale is fully complete, goes on to accept a higher offer from another.
With no laws in place to prevent it, this is something that happens all too often in England and Wales. According to a survey of 2,000 people conducted by Market Financial Solutions in January, 15% of adults in London have had a property purchase fall through as a result of being gazumped, with a national figure of 5%.
An offer is not legally binding until the written contracts are exchanged, which happens towards the end of the buying process when a whole bunch of other costs have already been incurred; arranging a property survey, having a solicitor conduct the necessary searches and receiving your mortgage offer.
Not only is it a massive disappointment to lose out on what perhaps was your dream home, but it can also leave you thousands of pounds out of pocket. Instructing a solicitor will cost anywhere from £500 to £1500, along with a fee of around £300 for searches to be submitted to the local council to check if any planning or local issues could affect the value of the property.
Then there is the cost of the house buyer survey, which – depending on the value of the property – could cost anywhere from £350 to £950. So, at the higher end of the average costs, you could spend upwards of £2,750 before you can begin to officially secure the property.
“We have just had the [property] survey done and I was idly checking Zoopla to see it was still being marketed by the other estate agents.
I got a friend to call and dig for info and she found out that the vendor had accepted our offer ‘very reluctantly’ and that he was continuing to market [the property] in case he gets a higher offer.
This has made me feel totally sick. We’ve just forked out on solicitors fees and a survey and the vendor is likely to drop us at the first opportunity!” – Sammisatt, Mumsnet.
The Communities Secretary, Sajid Javid announced a call for evidence in October to improve the experience of house buying, stating that moving the point in which a sale becomes legally binding is an option to prevent gazumping, as well as considering mandatory “lock-in agreements” to increase the trust between buyer and seller. These new house buying rules are due to come in to place very soon and could make the prevalence of gazumping even higher in the meantime.
If you are unable to increase your offer or unable to guarantee a quick, chain-free, mortgage-free, pain-free process for the seller, then you could well lose out.
Beware, there is also the potential for you to be ‘ghost gazumped’ by your seller, meaning they falsely tell you they’ve received a higher offer to see if they can squeeze anymore out of you.
Being gazumped can leave you victim to the chain, resulting in being stuck in your current property. You can avoid this, secure your dream house and save thousands by selling to a cash buyer such as ourselves.
As a cash buyer, selling with us can leave you chain free and in a great position to buy. There’s also absolutely no fees to pay – no legal fees, estate agency fees, survey or valuation fees, potentially saving you thousands.
If you think we could help you to sell your home, visit our homepage and enter your postcode for an instant cash offer.