Gazumping - What Is It And What Can You Do To Reduce The Risk Of Being Gazumped?
Moving house can often be a stressful time and there are many things that can go wrong, or things that can occur to delay the entire process. One of the most distressing things that can go wrong when moving house is being 'gazumped' when attempting to purchase a property. But what exactly is gazumping and can you prevent it from happening to you?
Gazumping means that the person from whom you are attempting to purchase the property - the vendor - accepts an offer from a higher bidder after they have already accepted your lower offer. For example, if you offer to pay £350,000 for a property and then, for one reason or another, the property remains on the market, and the vendor then accepts a higher offer from a second bidder (thus reneging on the agreement they had with you) you have been gazumped.
Being gazumped is different from simply being outbid. For example, if you put in an offer for a property of £345,000 and, before your offer is accepted, another bidder comes along and puts in an offer of £350,000 which is accepted, you have not been gazumped you have simply been outbid.
Unfortunately there are several reasons why a property may remain on the market even after your offer on it has been accepted by the vendor. For example, if you have not yet sold your own property the vendor may wish to keep their property on the market in case another prospective buyer comes along who is deemed as being a better position than you, i.e. they have sold their own property and would be ready sooner that you to complete the transaction. Also, if the vendor has accepted your offer - perhaps because they are in a hurry to move - but is not entirely happy with the figure you have put forward, they may wish to keep the property on the market to see if another buyer comes along and is willing to put in a higher offer (in which case, if the higher offer is accepted, you would be gazumped). People selling in a representative capacity such as Trustees and Executors may feel obliged to keep the property on the market to protect the interests of the beneficiaries of the trust.
Fortunately there are some steps you can take to reduce the risk of being gazumped : make sure that you are in as good a position as possible (i.e. accept an offer on your own property) before putting forward an offer on the property you wish to buy; when you put forward an offer to the vendor of the property you wish to purchase, make it a condition of the offer that if it is accepted the vendor must take the property off of the market (however you can not enforce this); push for exchange of contracts as soon as possible; maintain good relations with the vendor and keep them updated on how things with your own property are progressing.
Copyright (c) 2011 Robert Gray
Gazumping means that the person from whom you are attempting to purchase the property - the vendor - accepts an offer from a higher bidder after they have already accepted your lower offer. For example, if you offer to pay £350,000 for a property and then, for one reason or another, the property remains on the market, and the vendor then accepts a higher offer from a second bidder (thus reneging on the agreement they had with you) you have been gazumped.
Being gazumped is different from simply being outbid. For example, if you put in an offer for a property of £345,000 and, before your offer is accepted, another bidder comes along and puts in an offer of £350,000 which is accepted, you have not been gazumped you have simply been outbid.
Unfortunately there are several reasons why a property may remain on the market even after your offer on it has been accepted by the vendor. For example, if you have not yet sold your own property the vendor may wish to keep their property on the market in case another prospective buyer comes along who is deemed as being a better position than you, i.e. they have sold their own property and would be ready sooner that you to complete the transaction. Also, if the vendor has accepted your offer - perhaps because they are in a hurry to move - but is not entirely happy with the figure you have put forward, they may wish to keep the property on the market to see if another buyer comes along and is willing to put in a higher offer (in which case, if the higher offer is accepted, you would be gazumped). People selling in a representative capacity such as Trustees and Executors may feel obliged to keep the property on the market to protect the interests of the beneficiaries of the trust.
Fortunately there are some steps you can take to reduce the risk of being gazumped : make sure that you are in as good a position as possible (i.e. accept an offer on your own property) before putting forward an offer on the property you wish to buy; when you put forward an offer to the vendor of the property you wish to purchase, make it a condition of the offer that if it is accepted the vendor must take the property off of the market (however you can not enforce this); push for exchange of contracts as soon as possible; maintain good relations with the vendor and keep them updated on how things with your own property are progressing.
Copyright (c) 2011 Robert Gray