Lost your dream home through Gazumping?
26th October 2017
So you’ve seen the house, made an offer and it’s accepted. What could go wrong? Gazumping. It’s very common in the buying process, nearly a quarter of all sales fall through. According to the NAEA (National Association of Estate Agents), new research from estate agents all over the country reports that gazumping has risen in Britain and the West Midlands has seen a six year high. Austins has seen the demand for property in the West Midlands increase monthly. Our region is highly in demand for its jobs, healthcare and community. The reason for gazumping is simply vendors and purchasers are looking to get the best price and the best bid for their dream property. However it can become messy if it’s not handled correctly. It is stressful and emotional for everyone!
Gazumping is quite simply when the vendor accepts a higher offer after already agreeing the sale. So the question is, is this fair and how can anybody buy a house they fall in love with? The decision and outcome is usually left to the vendor with the estate agents advice and support. The recent news on this, from the communities secretary Sajid Javid, is that he wants to ban gazumping to make the buying process a lot smoother and a lot less stressful.
As well as gazumping he wants to focus on building confidence in the chain by introducing a ‘lock in agreement’. Therefore, once an offer has been accepted, it would be placed into a locked agreement. Ultimately, this means that you are tied into that property and can’t back out. Will this make a difference to people’s buying habits?
With the increase of online activity within the real estate sector, such as being able to book viewings online for properties, the government would like to consider making more information available online. This will allow easier access to documents and prevent time wasting. I would be interested to know exactly what information would be posted online and the security of those documents. Over the past years we have seen a change of the ‘high street’ estate agent incorporating the online world into their buying and selling process. Could the next change be how solicitors notify their clients by providing the information online? This may increase the speed of the buying process.
Lastly the government would like to consider the information that vendors and purchasers hold on their properties, they would like to see them gather evidence such as an EPC and other documents before the property is marketed. This will mean it is ready to go as soon as the offer comes in and is accepted. It will prevent the solicitor having to chase for the information which in time could delay the process dramatically. Being organised beforehand will save time for all parties!
Tips to decrease the risk of being affected by gazumping could be:
- Make sure you have an AIP (Agreement in Principle) before making an offer.
- Multiple viewings – If you like the property and want to view it again make the appointment! Take a family member with you as it shows you have discussed it with your family and are serious about buying.
- Inform the estate agent when booking the viewing of your position. Eg. first time buyer, sold your current property or wanting to move rather quickly.
- Solicitor already instructed just waiting for the right property.
To conclude, I feel that now is the time that something was done not only with gazumping nationwide but also with the chain chasing process. I think that by making the information available online, this will increase the speed of the process, as it’s easier to access and interpret information online. It will also help spare up the solicitors’ time leading to a quicker end result. What are your thoughts on this recent update is it a long time coming?