What is Gazumping? – is it a good idea?
Should you try and gazump on a house?
As a buying agent, we come across gazumping; for the gazumped, it can be very disheartening and difficult to navigate. For the property seller, it can be confusing, and for everyone else, it’s just downright annoying.
Nobody likes a gazumper – even the selling agents who stand to make more money out of a bigger deal. But they know that gazumping causes huge disruption and risks the deal going badly wrong.
What is Gazumping?
Gazumping is when a buyer places a higher offer on a house when an offer has already been agreed upon. Before the contracts are officially signed, there is no legal reason for a seller not to take a higher offer even when they already have a verbal agreement in place. This makes gazumping completely legal – albeit very tiresome.
The gazumper will most likely be a disorganised person who arrived late at the party. They’ve just started their property search, see something they love, and find it’s already under offer makes them want it more. If they weren’t new to the market, they would have seen the property earlier, so it’s worth bearing in mind that they won’t have yet made an exhaustive search of the market. Their head is likely to be turned by something else….and they will have little hesitation in dropping you.
Should I Try and Gazump?
Our advice to buyers is to refrain from gazumping. It’s a bad culture, and you will be viewed by the vendor (and potentially future vendors) with caution.
You are much better off making it clear to the agent that you are a good fallback if the sale doesn’t go through with the existing purchaser. Keep looking hard at other properties, and you may well find a problem arises with the sale, and you get your chance – honourably and without having to up the price.
This could be the perfect time to start working with a property finder like Stacks. If you indicate to us the property you found which is already under offer, we can find similar properties which we’re sure you’ll love. Our inside knowledge of the property market and the area means you won’t have to wait long for us to find your dream property – you might even like it more than the one you were considering gazumping on…
How to Avoid Being Gazumped – Our Top Tips
As a buyer, you can take steps to avoid being gazumped.
- Lock Out Agreements – A ‘lockout agreement’ gives you a clear run at purchase for a limited period, but even this doesn’t eliminate the possibility completely.
- Be mindful of the seller– You’re more likely to be gazumped if you’ve conducted a crippling negotiation. Remember, the right price for a property is the price at which BOTH the seller and buyer are happy. If the vendors are reluctant sellers at your price, they will welcome a better offer with open arms.
- Speed and Efficiency– Be reasonable about time scales and be understanding of vendors’ circumstances. Speed and efficiency are of the essence. The fewer delays built into a transaction, the more likely it is to succeed, removing the opportunity for gazumpers. Maintain the momentum, and make sure your solicitor has the same mindset. If they don’t understand the need for speed, efficient communications and the benefits of finding solutions rather than problems, you need a new solicitor.
- Get Your Survey Done ASAP– You have a much greater chance of hanging on to your deal if you have your survey done as early as possible and your offer is no longer subject to survey. You’ll be one step ahead of anyone else, even if they do put more money on the table.
- Be openly eager– Give the impression of constant forward motion, even if you are waiting on a crucial decision from, for instance, a planning officer.
- Ask for the listing to be taken down– Insist on the property being taken off the market, off the property portals, and off the agent’s site. And for there to be no further viewings. You may not necessarily get all this, but it’s worth pushing for it.
- Work with a Property Finder– the above tips can be a lot of work for the buyer to keep on top of. If you work with a property finder, we take care of this type of thing so that you don’t have to.
What to do if you’re Being Gazumped
Being gazumped is a horrible experience. But if it does happen to you, remember there’s a fair chance that the deal will fail to progress to completion. Gazumpers are very likely to have a change of heart, leaving the vendor with no buyer at all.
If this does happen, the agent will come back to you to see if you are still interested. While the temptation may be to tell them to go away (possibly using more colourful language), you can get more satisfying revenge by re-entering the negotiations but at a lower price than your original offer.
Gazumping is surprisingly rare in the current market. Despite the lack of stock, buyers are very conscious of price, and few are reluctant to flash more cash than necessary. It’s most likely to happen for hard-to-find property, not necessarily at the top end of the market.
Contact Stacks for more Information on Gazumping
Your Stacks Buying Agent are the ones best placed to advise you to avoid getting into a gazumping situation in the first place and, if it does happen, how best to react.
Find out more about how our house-buying expertise can be put to use for you by contacting your local Regional Director here.
