You know that awesome feeling you get when you make an offer on your dream home, and it gets accepted? So you start planning how you’ll decorate the rooms, how you’re going to landscape the garden, even what front door you’re going to choose… You even buy that storage basket you’ve been eyeing up because you know it’s going to be perfect in the conservatory.
And then you get a phone call to say someone has made a higher offer. There is a chance this could happen if you’re buying a home in England or Wales – and it’s called gazumping.
Gazumping is when even after your offer has been accepted another buyer makes a higher offer than yours on the same property. There are two things that can happen: either you raise your offer and match the new one, or even exceed it; or the seller can accept the new, higher offer. Which means you’ll end up starting to look for the perfect property again – and pop that cute storage basket you just bought into a box until further notice.
The fact is gazumping can happen anytime before the contracts are exchanged – even weeks after your offer has been accepted, even after you’ve spent money on surveys, got your mortgage, instructed solicitors.
Gazumping is completely legal in England and Wales so it’s worth knowing about in case you find yourself in this situation when buying homes. The legal agreement between you and the seller doesn’t kick in until you have exchanged contracts – until then both of you are free to pull out of the sale.
It’s a sad experience to go through – we know how it feels to lose a home you had your heart set on. But is there anything you can do to prevent gazumping? Maybe – here are a few tips:
- Be ready to move! Most sellers want buyers to be quick and be ready with a mortgage in principle, no ties (or minimum ties), have a solicitor ready.
- Be enthusiastic and interested – we’re all human and the sellers will appreciate your excitement about their home and your wish to make it yours. Keep the estate agent updated on your progress and any news to relay to the sellers so they know you’re proactive.
- Start the conversation early. We created Houso to help buyers and sellers avoid these unpleasant situations by using our off-market feature which showcases homes before they even hit the market. By looking at off-market homes you can make an offer, have it accepted, and not many other people would have even seen the home. Once your offer is accepted, ask the seller to remove the listing and your home won’t be found in search results.
If you have been gazumped you’ll feel frustrated and angry – here are a couple of ways to deal with the situation:
- Keep calm and collected. Things happen for a reason – maybe there is a home that’s even more perfect waiting for you. See what’s available on the market (or off-market!) and consider your options.
- Don’t go above your budget. It’s there for a reason – don’t react with a hot head and try and match the price that’s over your budget. You’ll get yourself in trouble that way – always stick to your financial calculations.
- Try and talk to the sellers/estate agent – if you’re not in a chain and the other buyer is, that’s an advantage that you can use to show yourself as a better buyer. Or maybe you can wait for the seller to find their home because you are in no rush to move – find out what the sellers position is and use your strengths.