Gazumping is back. This last-minute bidding practice is, once again, causing havoc in the property market - especially as we head towards the end of the stamp duty holiday.
Gazumping is a totally legal practice that sometimes occurs once a seller has accepted a buyer’s offer. Another purchaser interested in the same property can come in with a higher offer right up until exchange happens – even if the deal has been verbally agreed and the property listing shows as SSTC (sold subject to contracts). There’s not much that can be done about gazumping pre-exchange, as an estate agent is bound to pass on all offers to the seller.
Marketing conditions usually influence when gazumping is most prevalent. We usually see more gazumping when the supply and demand of property is out of kilter. More buyers than there are homes for sale leads to people making rash decisions as they become desperate to find a property and have an offer accepted.
It is currently estimated that almost one in four failed property sales is due to gazumping – fueled by a lack of available homes on the market and pressure to find a property to buy before the stamp duty holiday ends. Even big High Street agents, including Countrywide, have acknowledged that we’re in extreme times, with ‘multiple bids and a marked increase in gazumping’.
As a buyer, it can be heartbreaking - and costly - when a seller dumps you at the final hurdle in favour of an alternative purchaser, as you may have already invested time and money in conveyancing and surveying fees.
Here’s how you can avoid the threat of being gazumped:
If you have your heart set on a property and find yourself gazumped – especially if you’re very close to exchanging contracts – you may think about increasing your original offer. Beware of getting caught up in a bidding war that pushes you outside of your financial comfort zone.
The length of time between an offer being accepted and the safety of exchange – which can be weeks or even months – is an open door to gazumping but by buying at auction, you can slam that door firmly shut.
Open Online’s auctions - one of two ways we sell property fast - run on a reassuring ‘exchange on the day’ basis, meaning that once your bid is accepted and the gavel falls, no other buy can come in with a higher offer. We offer a degree of certainty in this fast-moving property market – peace-of-mind that your purchase will not be hijacked!