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Gazumping - 4 ways to protect yourself against being gazumped

10/01/2018

Gazumping has become common practice in today's housing market due to the short supply of properties and a huge demand from buyers. With the seller and the estate agent both set to benefit from any increase in the property value, buyers can feel alone and exposed.

So what can you do to protect yourself against being gazumped?

Here's our 4 best tips to protect you from the horrors of gazumping and tips on what you should do if you get gazumped:

Get an 'Exclusivity Agreement' with a non-refundable deposit

Reduce the time between your offer and exchange

Gazumping Insurance / No Sale, No Fee

Keep registered with local estate agents

We'll review how to protect yourself against gazumping in detail. One of the solutions we offer our clients is a no sale no fee on our solicitors' legal fees and you can get an online quote here.

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4 Ways to protect against being gazumped

Get an 'Exclusivity Agreement' with a non-refundable deposit

There are legal agreements, such as a 'lock-out / lock-in agreement' that can be drawn up at the point you put your offer in to tie in the seller so that they can't accept higher offers. These agreements can slow the conveyancing process down due to their detail and your solicitors will need to review them to protect your interests. The agreement normally requires you to pay a non-refundable deposit; normally around £2,000.

You may think this is a great solution, however being gazumped isn't the only thing you need protection from when buying a home. There are other complications such as the property being undervalued, legal issues or even structural defects. All of which could affect both your desire to buy the property and or even your ability. For instance if you mortgage lender undervalues the property and you can't get a mortgage you could be faced with having to walk away and losing your non-refundable deposit.

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Reduce the time between your offer and exchange

Reducing the time between placing your offer and exchange of contracts reduces the opportunity for other buyers to come along. To do this however is easier said than done especially as working with some conveyancing solicitors can delay the process rather than speed it up.

There are 2 ways to speed up the conveyancing process:

Instruct your solicitors before you place your offer so that you can get the initial paperwork, ID and protocol forms completed.
Choose a good conveyancing solicitor who uses fast communication such as telephone and email. Believe or not, most solicitors still prefer to use the postal system and this can add weeks onto the conveyancing process.

Gazumping Insurance / No Sale, No Fee

The cost of buying a home is expensive and if you are unfortunate enough to be gazumped you don't want to have to pay your solicitors every time this happens. By working with conveyancing solicitors that provide No Move, No Fee protection you won't have to pay for solicitors' fees for each gazumped property.

There are some gazumpung insurance products that protect you from the costs of purchase including your solicitor's fees, mortgage valuation and surveys. You should always read the terms of these insurance products as they often don't cover costs incurred prior to taking out the product.

Keep registered with local estate agents

Before you even get the point of putting in an offer you will have been searching Right Move, Zoopla and the new platform, On The Market, to find your dream home. There are some statistics to suggest that it take 22 viewings before you get an offer accepted so when you get gazumped it can feel incredibly disheartening to have to start all over again.

To stay ahead, you need to keep in contact with all of the estate agents in the location you are moving to. This means keeping on the property mailing lists, talking to the agents and searching the property portal. By doing this you'll be prepared for the worst if you do get gazumped.

If you need any further help or support with being gazumped please email us at help@samconveyancing.co.uk

Get a No Sale No Fee Conveyancing Quote*

* Fixed Fee – No Sale No Fee – On all Mortgage Lender Panels