In This Guide
Apply for a mortgage
Buying at auction
Buying in Scotland
Conveyancing
Find and view
Negotiate
Plan your purchase
Success and failure
1. Successful purchase
2. Don't forget
3. What is gazumping
4. Consequences of gazumping
5. Preventing gazumping
Surveys and valuations
To buy or not to buy
Success and failure
Preventing gazumping
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Gazumping is an unavoidable occurrence. However, there are things that can be done to minimise the risk of it happening to you:
Anything that you can do to minimise the length of time between
agreeing the sale and exchanging the contracts reduces the opportunity
for gazumping. Pre-qualifying with your mortgage provider and
appointing a solicitor before your offer is accepted are two things
you can do to help the sale go through quickly. Putting some gentle
pressure and encouraging urgency from those people involved in
the sale is another.
First up, check to see if the agent has a policy on gazumping.
A surprising number of them do, and will not allow it as a practice.
They may insist that the seller signs a written agreement to turn
down any offers once one has been accepted.
Aside from this, you should stay in regular contact with the selling agent and update them as you reach key stages, such as completion of the survey and a formal mortgage offer. A constant flow of information will help them feel comfortable that the sale is progressing, whilst an information blackout could make them uneasy, regardless of whether things are actually moving forward.
Drawing up a pre contract exclusivity agreement between yourself
and the vendor is a sure-fire way to prevent gazumping. You can
specify a sum in the contract that the vendor would have to compensate
you with. Use of these agreements is uncommon though, as you have
to pay to get a solicitor to draw one up, and not too many vendors
would be willing to sign one.
A lockout agreement is similar to an exclusivity agreement in that it should prevent the vendor from accepting another offer. The difference is that the agreement will only run for a set period of time.
You can also get insurance that covers you against the deal falling through. Though this is another potentially needless expense that won't help your timing, money is often a good compensation when things go sour.
In addition to these measures, the government is planning the
introduction of a seller's pack which should hopefully speed up
the homebuying process and thereby reduce the length of time in
which gazumping is possible. This information dossier will become
a mandatory requirement of anyone putting his or her home on the
market. It will include a basic surveyor's report and the results
of local authority searches - both of which are currently the
buyer's responsibility.
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