Gazumping - Be Prepared

With reports of between 10 and 20 buyers for each house in the south of England it's not surprising that gazumping (outbidding rivals at the last minute) has returned.

Gazumping is a horror that estate agents are powerless to stop. Under the Estate Agency Act they are obliged to pass on all offers received, although a determined buyer will probably go straight to the seller to make a last minute offer anyway.

So if you're a buyer, what can you do to avoid being gazumped? Well the most obvious solution is to take advantage of the new insurance schemes. There are some mortgage companies who will offer the buyer insurance against gazumping, on the proviso that you take out your insurance before you instruct your solicitor. Then if you are gazumped, you can be refunded the cost of your various fees - legal, survey and management lending charges. In particular markets these schemes look very attractive.

More traditional methods of protecting yourself against gazumping include offering the full asking price and then requesting the property be removed from the market. However, this method is not 100% effective if someone offers more than you and therefore you should always establish your credentials as a buyer: i.e. prove that you have the money and that you can move fast. Be flexible with the vendor and don't quibble about minor points. In fact, it's worth being nice to the seller in general. If you've established some kind of relationship with them it's always harder for them to let you down.

"Lawpack" the legal form maker now produce a form to protect against Gazumping. They describe it as "A form of contract between a buyer and seller of a property, that prevents the seller from dealing with other prospective buyers during an 'exclusivity period', thereby protecting the buyer from being gazumped during this period. It does not bind the seller to sell the property nor the buyer to buy the property. After the exclusivity period expires the seller is free to deal with other prospective buyers."

As well as transit insurance, some removal companies offer additional insurance (i.e. Careline and the Removal Protection Bond) to cover problems such as late completion, damages to the property within the first few days of you moving in, like burst pipes, etc and legal complications.

Can you imagine moving from London to Scotland and your car breaks down half way up there? Or not being able to move in until Monday morning, after the weekend? Well, removal companies can and that is why many of them offer extra insurance to cover this. Please speak to your removal or shipping company about this when you contact them.