The ever-present perils of gazumping and gazundering
Buying or selling a home means handing money to an ever-growing list of people, the deposit, the survey, disbursements, removals, all chipping away at a tight budget. Some of these costs can be delayed until they are unavoidable, and a few can be trimmed. The survey is not one of them: skipping it to save money is a false economy, since it is there to flag problems with the property before you commit, and finding them out after completion is a far more expensive lesson.
With buying a home being one of the biggest financial commitments most people will make, it is easy to see why the whole process feels daunting, and why the practices of gazumping and gazundering are rearing their ugly heads again.
What is gazumping
Gazumping happens when a seller accepts your offer, then accepts a higher one from someone else before contracts are exchanged. It is not illegal, since nothing is legally binding until that point, but it leaves the original buyer out of pocket for survey and solicitor fees with nothing to show for it.
A few ways to protect yourself:
- Ask the seller to sign a lock-out agreement, which gives you exclusivity for an agreed period.
- Ask for the property to be taken off the market so agents cannot keep showing it to other buyers.
- Keep momentum going by instructing your solicitor immediately, so enquiries, identity checks and anti-fraud checks are underway from day one.
- Consider home buyers protection insurance, which covers costs already incurred, survey, disbursements, mortgage arrangement fees, if the purchase collapses.
- Choose a solicitor with a no completion, no fee guarantee, so you are not left paying legal fees on a sale that never happens.
What is gazundering
Gazundering is gazumping’s mirror image, aimed at sellers rather than buyers. The offer has been accepted, the survey is done, contracts are due to be exchanged, and then the buyer comes back with a lower figure, often just hours or days before the deadline. Having already sunk time and money into the sale, many sellers feel they have little choice but to accept.
Ways to protect yourself as a seller:
- Be upfront with your estate agent that there is no room for last-minute renegotiation, reasonable requests following genuine issues found in the survey are a different matter.
- Instruct your solicitor as soon as the property goes on the market, so searches and standard enquiries are already in hand.
- Take the property off the market as part of accepting an offer, with an understanding that late renegotiation is off the table.
- Use a solicitor offering a no completion, no fee guarantee, so a collapsed sale does not cost you legal fees on top of everything else.
- If it comes to it, you can simply hold your ground and decline the reduced offer.
Both practices remain legal for now. The government has reform plans in motion aimed at making agreements binding earlier in the process, we have covered what has been announced and what it could mean for your budget in more detail separately.
Choosing the right solicitor matters either way
Whichever side of a gazumping or gazundering situation you find yourself on, having a solicitor who moves quickly reduces how much leverage the other party has over you. That does not mean you have to overpay for it. At Best Value Conveyancing, we assign you to one of our panel of experienced solicitors to keep your legal work moving at a competitive, fixed price.
All our quotes are fixed, with disbursements set out upfront, and we offer a no completion, no fee guarantee, so if your move falls through, including through gazumping, you will not be left paying for it. Call us on 08000 387 007, or get a quick quote online in a minute.
