Navigating the property market can be tricky, especially when faced with the prospect of gazumping. This frustrating scenario occurs when a seller accepts your offer, only to later accept a higher bid from another buyer before contracts are exchanged. Here’s how to protect yourself from this unsettling experience.
Understanding Gazumping
Gazumping is legal in England and Wales, as a sale is not legally binding until contracts are exchanged. This can leave buyers vulnerable to losing their dream home to a higher bidder.
Why Gazumping Occurs
Sellers may be swayed by a better offer, especially in a competitive market. They might also prefer buyers in stronger positions, such as those who are chain-free or cash buyers, to maximise their sale price.
Reducing the Risk of Gazumping
1. Act Swiftly
Once your offer is accepted, promptly instruct your solicitor and mortgage lender. Delays can increase the risk of another buyer stepping in.
2. Secure a Mortgage in Principle
Having a mortgage in principle demonstrates your seriousness and financial readiness, making your offer more appealing to sellers.
3. Communicate Regularly
Maintain open lines of communication with the seller and their agent to show your commitment and keep the process moving smoothly.
4. Consider a Lock-Out Agreement
Negotiate an exclusivity or lock-out agreement, if possible, to secure a set period during which the seller cannot consider other offers.
5. Be Prepared for All Outcomes
Despite best efforts, gazumping can sometimes be unavoidable. Having a backup plan can help reduce stress and enable you to move on swiftly.
By being aware of gazumping and taking proactive steps, you can make your homebuying journey smoother and less stressful. At Fine & Country Chiswick, our team is here to guide you through the process with expert advice and support.