Gazumping and gazundering are common phrases you might hear in the buying and selling of property, but what are they are how can you avoid them?
This is when a purchaser of a property has an offer accepted, then before the purchase completes, the seller accepts another offer from a different buyer. This can happen sometimes days before exchange. Is it legal? unfortunately yes, the seller has the right to sell the property to another buyer should they wish, before exchange of the property, at which point the sale becomes legal.
So how can we avoid this? in all honesty, you can’t. However, here are some tips that will help avoid gazumping.
- Try and act quickly – show the seller you mean business. Get your paperwork into the estate agent as soon as possible and book the survey in.
- Mortgage in principle – make sure you have your mortgage ready. I recommend using a broker who can speed the mortgage application up for you and guide you through some hoops you may be required to jump through. If you would like some mortgage advice, get in touch, it’s important to get expert advice.
- Have your solicitor / conveyancer ready to go – choose wisely. The conveyancing process is where most deals can break down. Ensure you have your payments ready for any searches, or other payments you may require as these payments need to be done through the solicitor. If you need help or advice choosing a solicitor get in touch and see our market place for conveyancers.
- Get the property off the market – when making an offer, ensure part of the offer is that the seller removes the property from the market.
- A lock in agreement – These aren’t used much at the moment, but they will becoming more common over the next few years. Normally, the buying and selling process of property is not legally binding until exchange of contracts. However, with a lock in agreement, you can tighten up this process by having financial penalties to breaking the agreement.
- Get insurance – You can get insurance to cover your out of pocket costs should you get gazumped. If you choose a solicitor through our marketplace you qualify for free insurance.
This is when a buyer of a property lowers their offer, normally near the end of the buying process to pressure you into accepting a lower price. Is it legal? Again, unfortunately yes. The buying process doesn’t become legal until exchange of contracts.
Here are some tips to help avoid this.
- Survey – Your buyers are likely to have a survey done, especially if buying with a mortgage. Push for them to get the survey done as quickly as possible.
- Exchange of contracts – Try to agree a date to exchange contracts. This give the buyer and solicitors a date to work do. Try to keep this on track. A good estate agent should have this under control.
- Be realistic – Your property should be priced to entice buyers. Do not over price the property as this will only increase your chances of the initial offer be lowered. This is especially prevalent if a surveyor confirms in his report the property is overpriced.
- Red flags – If a buyer offers significantly over asking price then this could be a red flag. There is a strong chance they could reduce their offer near to exchange to pressure you into accepting a lower price.
- Be ready – have all your paperwork ready and have your solicitors ready to go. If you need help choosing a solicitor get in touch. You can visit the conveyancing marketplace which shows solicitors costs and ratings. You will also then be eligible for free insurance to cover any out of pockets expenses should the sale fall through.
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