“Property Gazumping”

Avoid being Gazumped

You’ve made an offer on a property.  Congratulations!  You might have had to negotiate a bit, but that’s OK.  You realise this is your perfect home and you can’t wait to move in.  You then get a rather awkward call from the estate agent.  He informs you that unfortunately the seller, (whom you took to be a gentleman) has received a higher offer from Buyer #2.  Property gazumping is unpleasant and can knock your confidence in buying.  What can you do?

Your choices appear limited, as the vendor seems to have you over a barrel.  Either you match or exceed Buyer #2’s offer, or you withdraw from the purchase.  Either way you lose.  Even if you do offer more, Buyer #2 could still come back and even exceed that.  Then a bidding war starts with only one eventual winner.  The ‘winner’ might subsequently regret going so high.

Good agents do not encourage gazumping.  Estate Agents are obliged by law to submit all offers in writing to the vendor.  It is the vendor who decides how to proceed, and which buyer’s offer to accept.

There’s little you can do to repel a determined bidder, but there are ways to reduce the chances of it happening to you.

Avoid Property Gazumping

Firstly, you could offer the full asking price and formally ask the vendor to withdraw his property from the market. You could go further than this and purchase a formal first right of refusal from the vendor.  This would include the vendor instructing the agent in writing not to submit any further offers, overcoming the Agent’s legal obligation to do otherwise.  Although you might have preferred to pay a little less than the asking price, you could regard the ‘extra’ as a form of insurance against having to pay more following a gazumping situation.  This is not uncommon in a sellers’ market.

Only offer to buy when you are in the strongest buying position.  Keep in touch with your solicitor.  Make sure you have arranged your mortgage.   Maybe rent for a while rather than allow a linked sale to disempower you.

Feel free to call us on 01273 735237  or email teamsales@callaways.co.uk for any advice you might need – we’d be happy to help.