Buying property in East London? Four ways to avoid being gazumped
When one buyer has made an offer on a property and has had it verbally accepted, then has it rejected because a second buyer makes a higher offer, it is called gazumping.
Gazumping in the East London property market
With reasonable asking prices from sellers and sensible offers from buyers, not to mention the fast pace of the London property market, gazumping isn’t usually too much of a problem for Dockleys clients. On the other hand, gazumping is legal (up until you exchange contracts), it does happen, and, to be honest, who can blame a seller for wanting to get as much as possible for their property?
How to avoid being gazumped
Fortunately, with a bit of preparation and confidence, you can minimise your chances of being gazumped. Here’s our quick guide.
1. Be prepared
When you’re at the financial planning stage of house buying, it can be a good idea to take out a mortgage in principle. This is where the lender agrees, in principle, to give you a mortgage for a property of a certain value, based on your income and the size of your deposit. When it comes to the offer stage of house buying, having a mortgage in principle shows that you’re a serious buyer who will be able to move quickly. This means that you might be able to exchange before anyone else offers more money for the property, and might give you the advantage if the gazumper has not yet spoken to a lender.
2. Take out home buyer protection insurance
This won’t prevent you from being gazumped, but it will save you from being left out of pocket should gazumping occur. You can claim back any survey and conveyancing fees that you spent in pursuit of your new property, as well as anything you’ve paid to your mortgage lender.
3. Gazump the gazumper!
This is a risky strategy as it could end up becoming a sort of auction, with the gazumper also raising their offer. That said, if you can afford to (or maybe if you put in an optimistically low offer in the first place), it can show how serious you are about buying the property and put the gazumper off.
4. Give yourself the advantage
House buying is notoriously stressful, but it’s worth making the effort to behave positively with everyone involved. You’re not supposed to have contact with the seller, but there’s nothing to stop you sending a cheerful card to thank them for accepting the offer and letting them know how pleased you are.
Equally, be confident of what makes you the right buyer. Gazumping is only about money – you might have other reasons why you’re the best person to sell to. You might be able to exchange contracts more quickly or be flexible about your moving in date. Perhaps you’re not part of a chain, or you’re a cash buyer and you don’t need to delay the process by taking out a mortgage. If the sellers find themselves choosing between your offer and a higher one, give them as many solid reasons as you can for choosing yours.
I really hope you’ll find the house of your dreams, have your offer accepted and be able to move in as soon as you’ve completed the transaction. If you follow the suggestions above, you lower your chances of being gazumped and raise your chances of buying the property you deserve.
Buy and sell property in East London
To find out more about buying and selling property in East London, give me, Adam Dockley, a call today on 020 3633 4440.