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.
A gazumper is most likely to be a disorganised person who has arrived late at the party. They’ve just started their property search, see something they love, and finding 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.
Our advice to buyers is not to gazump. It’s a bad culture, and you will be viewed by the vendor (and potentially future vendors) with caution. You are much better to make it clear to the agent that you are a good fall-back if the sale doesn’t go through with the existing purchaser. Keep looking hard at other property and you may well find a problem arises with the sale and you get your chance – honourably, and without having to up the price.
How to not be gazumped
As a buyer, you can take steps to avoid being gazumped. A ‘lock out agreement’ gives you a clear run at purchase for a limited period of time, but even this doesn’t eliminate the possibility completely. 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.
Be reasonable about time scales and be understanding about vendors’ circumstances.
Speed and efficiency are of the essence. The less delays that are built into a transaction, the more likely it is to succeed, removing opportunity for gazumpers. Maintain the momentum, and make sure your solicitor has the same mindset. If he or she doesn’t understand the need for speed, efficient communications and the benefits of finding solutions rather than problems, then you need a new solicitor.
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.
Give the impression of constant forward motion, even if you are waiting on a crucial decision from, for instance, a planning officer.
Insist on the property being taken off the market, off the property portals, and off the agents site. And for there to be no further viewings. You may not necessarily get all this, but it’s worth pushing for it.
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. 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.
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 on how our house-buying expertise can be put to use for you by contacting your local Regional Director here.
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