Gazumping - what is it, and why should it be banned?
If you have ever bought a home, you know how emotionally draining it can feel, viewing houses, putting in offers and praying that finally someone will say yes and you can start the process of making your chosen property a home that you own. But what if before you signed on the dotted line, your offer, after being accepted, is then rejected because you have been gazumped?
Gazumping is basically when a seller decides to accept a higher offer after already agreeing to a sale. You may have already had surveys undertaken and be eagerly waiting to engage, and then you receive a call to inform you that the vendor has backed out because they have been offered more money for their home.
You have every right to feel angry and cheated; an agreement has been made and accepted, but because the paperwork hasn’t been exchanged you’re in a powerless position. It is for this reason that the Government has launched a consultation looking at ways to make buying a home more streamlined.
Communities Secretary, Sajid Javid, said: "We want to help everyone have a good quality home they can afford, and improving the process of buying and selling is part of delivering that. Buying a home is one of life's largest investments, so if it goes wrong it can be costly.
That's why we're determined to take action to make the process cheaper, faster and less stressful. This can help save people money and time so they can focus on what matters - finding their dream home.”
It’s estimated that around 25-30 % of transactions fail, at a cost each time of around £700 – this is a staggering statistic. Gazumping is just one of the causes, and many sales fail due to delays in a system that many feel is antiquated.
When delays occur it can make all parties involved nervous, delays could be caused anywhere in the chain, but if it affects your transaction it can start to create doubts, frustrations and you may begin to second-guess your decision. Rightly or wrongly, delays lead to failed transactions.
Part of the Government’s consultation will look at a new ‘legal commitment to buy’, which will penalise both buyers and sellers should they decide to pull out of the sale after a certain point without good reason.
"The current home-buying process is outdated and flawed. The Government must put consumers first, ensuring that estate agents deliver a better service for both homebuyers and sellers, and that the conveyancing process is simplified," said Alex Neill from consumer group, Which?
We will be watching with interest the results of this much-needed consultation, and hope that a new system of buying and selling homes will be introduced in the years to come.
You can help prevent delays by being well prepared for the sales process, this includes ensuring the required documentation is close at hand and ready for when it is requested. Being quick to respond to requests and keeping on top of communication can all play a part.
If you would like more advice on how to prevent delays in the sale or purchase of a property, please contact a member of our sales team at your local branch.