Ah, the excitement of finding your dream home! You’ve made your offer, and it’s been accepted. But wait! What’s this? Another buyer has swooped in with a higher bid, and suddenly, you’re back to square one. Welcome to the world of gazumping—a frustrating and costly bump in the road for many homebuyers in England and Wales. But don’t worry, we’ve got some top tips to help you protect yourself.
What Exactly is Gazumping?
In simple terms, gazumping occurs when a seller accepts an offer from you, then backs out before contracts are exchanged because someone else has offered more. Until contracts are exchanged, nothing is legally binding, which can leave buyers vulnerable.
Why Do Sellers Gazump?
In a competitive market, sellers might be tempted by a better offer, especially if the new buyer is in a stronger position, like being chain-free or a cash buyer. Ultimately, sellers want to maximise their sale price.
How Can You Reduce the Risk?
- Move Quickly: Once your offer is accepted, get your solicitor and mortgage lender involved immediately. Time is of the essence!
- Get a Mortgage in Principle: This shows sellers you’re serious and financially ready, making your offer more appealing.
- Stay in Touch: Regular communication with the seller and their representative shows your commitment and keeps the process on track.
- Consider a Lock-Out Agreement: Negotiate an exclusivity agreement to secure a set period to exchange contracts without competition.
- Be Prepared: Sometimes, despite your best efforts, gazumping happens. Having a backup plan can ease the stress.
Being proactive and prepared can make your homebuying journey smoother. And remember, if you’re navigating the property market, we at Sawyer & Co are here to help you every step of the way. Happy house hunting!
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