This has some interesting information about the house buying process. Gazumping is a thing, although in my experience it is pretty rare, if there’s a lot of interest then in my experience it goes to sealed bids.
31% of homeowners gazumped at least once while trying to buy their property
Four-fifths of homebuyers are in favour of banning gazumping in England and Wales, new research revealed[1]. It found that 31% were gazumped at least once while trying to buy their property, with the figure rising to 52% among those who bought in London.
Gazumping occurs when a property seller accepts an offer from a buyer, only to then accept a higher offer from another buyer. This can happen at any stage of the sale process, from when an offer is first made, to just before exchange of contracts.
Move to exchange contracts quickly
It’s worth noting that gazumping isn’t currently illegal in England and Wales, so if you’re involved in a property sale, it’s something you need to be aware of.
If you’re the buyer who has had their offer accepted, then had the rug pulled out from under you by a higher offer, it can be hugely frustrating and expensive. The best way to avoid this happening is to move quickly once your offer has been accepted, and try to exchange contracts as soon as possible.
It could come back to bite you
As a seller you can accept an offer, but it isn’t legally binding and you could then subsequently accept another, higher offer from a different buyer, right up until the point of exchange. However, if you do choose to gazump a prospective buyer in this way, it’s worth bearing in mind that it could come back to bite you – if they eventually decide to pull out of the sale.
While 79% are in favour of the government introducing laws to ban gazumping in England and Wales, 47% admitted they would consider gazumping a rival buyer themselves in the future if it meant getting the property they wanted.
High demand and limited supply
The research found that 68% of homeowners feel the property market is too competitive, with 79% believing that gazumping and gazundering have become more common in recent years due to high demand and limited supply.
Of those who have been gazumped, 17% said they ended up buying a property they liked less.
Elsewhere, the study found that a quarter (25%) of homebuyers were gazumped because they were stuck in a long property chain and took too long to complete the purchase.
Property purchase falls through
Another 20% admitted that they were gazumped due to delays and long waiting times in getting a mortgage. Almost a quarter (23%) said that they lost money in intermediary fees as a result of being gazumped. This is noteworthy, given it is estimated that homebuyers lose an average of £2,700 when a purchase falls through.
The research shows that long property chains and time-consuming mortgage applications often leave homebuyers open to gazumping. So, preparation is key – sourcing the right lender and product ahead of time, and working with service providers who can act quickly, could prove crucial in ensuring a deal is completed with no complications.
What kind of mortgage do you need?
We want to help get any generation on the property ladder, from the first-time buyer to the last-time buyer. We’ll help you to speed up the process to find a mortgage that’s right for your specific needs. To discuss your options, contact The Surrey Mortgage Broker – telephone 01252 759233 – email richard@thesurreymortgagebroker.co.uk
Source data: [1] Market Financial Solutions survey of more than 500 people who have bought a home in England or Wales since 2012.