What is Gazumping and Gazundering?
Gazumping occurs during the process of buying a house when a seller of a property accepts a buyer's offer, but they then receive a higher offer from another party and accept this new increased offer. Therefore, they’ve rejected the offer of the first buyer that had previously been accepted.
Gazumping can take place at any time during the Conveyancing transaction up to the point of exchange of contracts, as up until this point there is no legal agreement in place for the transaction to take place. The cost of any Conveyancing fees for surveys, searches and legal expenses incurred by the original buyer up to this point will be lost and are non-recoverable from the seller.
For free initial advice get in touch with our Conveyancing Solicitors.
What Precautions Can You Take?
While the possibility of gazumping always exists, and is more likely if there are more buyers than sellers in the market, there are steps you can take to reduce your chances of being gazumped.
For instance, you could ask the seller to take their property off the market when you submit your offer. While they’re not obliged to do so, some may accept your request, particularly if you’ve established a good relationship with both the seller and the estate agent.
You can do this by keeping in regular contact with them, as they might be less likely to look at other offers if they know you’re actively aiming to close the deal. Also, try to proceed with the sale as quickly as possible, as this gives the seller less opportunity to pull out, and state when you offer that you want contracts to be exchanged within a set time.
Gazundering relates to when, normally close to the point of exchange of contracts, the buyer will suddenly lower their offer on the property they are buying with the knowledge that should the seller not accept the lower offer, then there is a chance that the whole Conveyancing chain might collapse. As the vendor doesn’t wish for this to happen, they may be forced into accepting the reduced offer.
Try to move quickly with your sale, as proceeding quickly means there is less time for the buyer to reduce their offer. At the same time, make sure you’re selling your house at a reasonable price that reflects what’s available elsewhere on the market. Buyers will be less likely to try lowering their offer if they know they are paying a reasonable price for a property.
Simpson Millar is a national law firm with over 500 staff and offices in Bristol, Cardiff, Lancaster, Leeds, Liverpool, London - Euston, London - Fleet Street, London - Teddington, Manchester, Morecambe and Southport.