{"id":1142,"date":"2020-03-11T13:39:26","date_gmt":"2020-03-11T13:39:26","guid":{"rendered":"https:\/\/magnetcapital.co.uk\/?p=1142"},"modified":"2020-03-31T12:24:58","modified_gmt":"2020-03-31T11:24:58","slug":"gazumping-what-you-need-to-know-about-it","status":"publish","type":"post","link":"https:\/\/magnetcapital.co.uk\/blog\/gazumping-what-you-need-to-know-about-it\/","title":{"rendered":"Gazumping – what you need to know about it"},"content":{"rendered":"

If you are buying a property, or about to go through the process of doing so, you have likely heard of the term gazumping. But what exactly does it mean? If you are a buyer, making sure that you know what gazumping is key, so you are aware of the ways it may set you back, as well as what you can do to avoid it.<\/p>\n

What is gazumping?<\/h2>\n

The act of gazumping is when another buyer puts in a higher offer on the property you are currently in the process of buying and the seller accepts this last-minute offer instead.<\/p>\n

For anyone who has gone through the experience of having their offer accepted by a seller, only to have it suddenly rejected due to another buyer’s higher offer, can attest it is a difficult situation to be in.<\/p>\n

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What happens if I am gazumped?<\/h2>\n

For the majority of buyers who find themselves being gazumped by another buyer offer, there are really only two options.<\/p>\n

The first is to make a higher offer than the other buyer who has gazumped you. This may mean having to pay a significant amount more, which may be out of your property budget.<\/p>\n

The alternative, and for many there is no other choice, but to start all over again and carry out a new property search.<\/p>\n

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Is gazumping illegal?<\/h2>\n

No, as unpleasant as it is for buyers to go through, it is not illegal under English law. The property agreement only becomes legally binding once contracts have been exchanged, meaning that gazumping is effectively exempt.<\/p>\n

You can see on a variety of property listings online are listed as ‘Sold STC’ meaning an offer has been received and accepted, but the sale is ‘subject to contracts’ meaning contracts have not come into exchange yet.<\/p>\n

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What are the consequences of gazumping?<\/h2>\n

Apart from the main consequence – losing the property you were buying-\u00a0 other negatives include the high costs accumulated, as gazumping usually occurs later on in the property process. Buyers have usually already spent a considerable amount on surveys and paying a conveyancer, as well as arranging a mortgage.<\/p>\n

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When can gazumping happen?<\/h2>\n

Unfortunately, gazumping can take place at any time prior to contracts being exchanged between two parties.<\/p>\n

The main reason gazumping occurs is, as previously mentioned, is because another buyer has made a higher bid than you. However, in a small number of cases, the reason could be down to timing issues. For example, if the property buying process is going too slowly (such as the conveyancing survey taking too long to complete) then the seller may choose another buyer who can move at a quicker rate.<\/p>\n

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How to avoid being gazumped<\/h2>\n

Here are the main ways you can reduce the risk of being gazumped:<\/p>\n