Conveyancing Nightmares: Mr Gazumper Recently Spotted in Bristol
So, you’ve found the house of your dreams.
You’ve thought it over, deliberated, cogitated and decided to make an offer.
You’ve gone to the not inconsiderable expense of having a survey carried out on the property, you’ve pumped and primed your Conveyancing Solicitors and roasted your Lender into providing you with sufficient mortgage finance.
And then, a few days before you exchange contract, the phone rings
Your Seller has decided to take another higher offer.
And it’s curtains for you
This is called Gazumping: it’s very impolite potentially costly and it is alas perfectly legal.
The market forces of supply and demand writ large.
It can cause havoc and if there is are chain of transactions linked to your particular sale or purchase you will not be the only ones affected.
Gazumping in Bristol
A recent survey has highlighted that recent increases in the property market has seen a resurgence in Gazumping.
Brighton is the hotspot with 34.9% of people affected but Bristol comes in 5th place 20.8% of people affected – or one in five purchasers missing out.
Gazumping, the research found, is likely to affect properties the more they are worth.
Where Gazumping occurred nationally 26.8% were on properties of £500,000 or above, 25% on properties valued between £200,000 and £500,000 and 18.9% on properties under £200,000.
The Legal Bit
Until contracts are exchanged ( see our Conveyancing Jargon Buster: What’s the Name of that Legal Thingy) no one is legally bound to follow through with the transaction (for those who like chapter and verse and impromptu quiz questions; originally Section 40 Of Law of property Act 1925 as amended by Section 2 of Law of Property (Miscellaneous Provisions) Act 1989).
So although your Seller has agreed to sell his or her property to you “subject to contract” – it means your Seller can withdraw from the sale and accept a higher offer up until contracts are physically exchanged.
What Can You Do To Prevent Gazumping Happening To You
A bit like Death and Taxes it’s difficult to stamp it out entirely.
But there are things you can do to lessen your chances.
10 Top Tips To Prevent Gazumping:
- As Amy Winehouse said in “Valerie” No.1 - Get a Good Lawyer!
- A Conveyancing Solicitor with the Conveyancing Quality Standard (CQS) standard specialises in Conveyancing and doesn’t meddle in other types of law. Conveyancing: Pure and Simple
- The more efficient your Conveyancing Solicitor is the less likely that someone else will get in there before you.
- Instruct your conveyancing solicitors promptly and fill in forms, send money etc. on time.
- Sort out your financials as quickly as possible. Lenders are getting more bureaucratic and taking longer.
- Keep communicating- warn your Conveyancing Solicitor of the risk of Gazumping,
- Keep in regular contact with the Seller’s estate agent. If you keep them updated on how the purchase is going they more likely to advise against other offers.
- “Lock Out” or Exclusivity Agreements where Buyer is granted exclusive right by the Seller to exchange contracts within a strict time limit. Problem being that in a rising market it is difficult to get every Seller to agree.
- If possible take out insurance to cover against Gazumping. Few insurance companies offer it these days, but there are a couple who do.
- Insist the house is taken off the market (and the internet) once your offer has been accepted.
The more proactive and efficient your Conveyancing Solicitor, the quicker you will get to an exchange of contracts and avoid the Seller getting twitchy.
As always seek the advice of your Conveyancing Solicitor.
But, do it early.
Remember Mr. Gazumper might be out there waiting in the wings