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All our fees are fixed and if you get gazumped you wont pay our fees.
Gazumping - 4 ways to protect yourself against being gazumped
02/07/2021
Gazumping meaning
Gazumping is the term used when the seller accepts a higher offer from another buyer. This leaves the original buyer exposed to paying their conveyancing costs and hunting for a new property to buy.
Gazumping isn't illegal because the seller is not legally bound to sell to the buyer until exchange of contracts.
So what can you do to protect yourself against being gazumped?
4 Ways to Avoid Gazumping
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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.
Fixed Fee – No Sale No Fee – On all Mortgage Lender Panels
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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.
What is ghost gazumping?
Being gazumped is upsetting for the buyer, however some buyers question whether there is a higher offer, or whether it was a ghost offer. A ghost offer isn't real and there isn't another buyer.
The estate agent's gazumping policy should stop this practice.
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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 gazumping 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.
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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.
What are the costs of gazumping?
These are the costs buyers may have paid by the time they are gazumped:
- Solicitor’s legal fee ranging from £0 to £750 INC VAT
- Property searches ranging from £265 to £450
- Mortgage application fee ranging from £0 to £500 INC VAT
- Mortgage survey ranging from £0 to £600 INC VAT
- Building survey ranging from £480 to £1,000 INC VAT
Total loss for buyer after being gazumped - from £745 to £3,300*
* Figures only estimated and losses could be greater.
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