6 Things You Can Do To Minimise The Risk Of Being Gazumped

How to avoid being gazumped
Here, the Property Road team looks at the issue of how you can minimise the risk of being gazumped – gazumping describes the process whereby a property seller accepts a purchase offer, then has a change of mind and decides to accept a better offer from another buyer.

While this may result in an advantageous situation for the seller, the buyer who has been gazumped suffers disappointment, inconvenience and in most cases unrecoverable costs too.

It has to be said that gazumping is not against the law since buying or selling a property in England and Wales doesn’t become legally binding until written contracts are exchanged.

Until then, both the seller and the buyer are free to change their minds and pull out of any agreement should they wish to do so.

There is usually a delay of several weeks if not months between an offer being accepted and contracts being exchanged.

The time is necessary so that your conveyancing solicitor can conduct the necessary searches and checks, your mortgage offer can be finalised, and you have the opportunity to arrange for a property inspection and survey.

Gazumping Is On The Rise

Many industry experts are warning that gazumping is on the rise, particularly in London. If you are a buyer who has been gazumped, chances are that another buyer came forward with a higher purchase price – but that doesn’t have to be the reason.

The seller can reject your offer in favour of someone else’s for any reason.

Perhaps you experienced difficulties with your mortgage application, or there was a delay in the sale of your property, and a cash buyer came along who could proceed immediately?

Whatever the reason, if you had your heart set on buying a property and lost out to another buyer, it can be a huge blow. So, what can you do to avoid being gazumped, and potentially wasting thousands of pounds in conveyancing, mortgage arrangement and survey fees?

1) Be prepared to act swiftly

minimise the risk of being gazumped - Act quick to avoid gazumping

If you want to minimise the risk of being gazumped, it goes without saying that the shorter the time between your offer being agreed and contracts being exchanged, the less opportunity there is for gazumping to occur.

This doesn’t mean you should rush things through at the expense of due diligence, but it does mean that you ought to proceed with a sense of purpose and direction.

Obviously, you need to allow enough time for a property survey to be carried out, and the time it takes for local searches to be completed may in fact be out of your solicitor’s control.

But the more elements of your purchase are already in place when you make the offer, and the quicker you respond to requests for information from your solicitor or the estate agent, the smoother the entire property transaction is likely to proceed towards a desirable outcome.

We found that finding the right solicitor before making an offer can speed things up. Because finding the right conveyancing solicitor is important, it might take you some time. By doing this work beforehand, you can instruct your solicitor the same day your offer has been accepted.

In our experience, this hack also works for surveyors. If you already have a surveyor at hand, you can arrange the survey as soon as your offer has been accepted.

Not only will this speed up everything, it shows the seller that you are serious and well-organised. A new buyer might have a higher offer, but they might not be as well-prepared as you.

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2) Have your finances in place

Unless you are a cash buyer, having a mortgage in place when your offer is accepted will put you in the strongest possible position as far as the seller is concerned.

In fact, your current financial position should be one of the first things the estate agent will ask about in order to establish your credibility as a buyer which is an important step to minimise the risk of being gazumped.

Aim to have a mortgage in principle agreed; this is a conditional offer made by your lender that lets you borrow up to a specified amount. Once you’ve chosen your property, the mortgage can then be confirmed and the fund transfer date authorised.

We haven’t had the luxury yet to be a cash buyer, so always needed a mortgage. To ensure that we were ready to proceed we called a chosen lender the day we accepted an offer on our home. This means, by the time we found a property we wanted to make an offer, we already had a mortgage in principle in place.

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3) Pre-assemble your professional team

Doing as much homework as you can will allow you to hit the ground running once your offer is accepted, which can pay huge dividends and be big factor to minimise the risk of being gazumped.

This goes for getting your finances lined up as well as getting quotes from conveyancing solicitors, property surveyors and even removal companies. Assemble your team well in advance so that you’re able to proceed without delay.

Crucially, don’t make the mistake of thinking a simple mortgage valuation report will suffice.

Rather than skipping the survey, it is essential to take independent professional guidance:

Commissioning a home survey is a simple, economical way to avoid unpleasant and perhaps costly surprises after moving in. In some cases, a surveyor’s report may even enable you to renegotiate the purchase price”, Brian Gale Surveyors.

4) Get the property taken off the market

Our 'Sold' Sign
The ‘sold’ sign went up pretty quickly at our property

It is normal estate agents’ practice to stop marketing a property once an offer on it has been accepted, and marking it as SSTC (sold subject to contract).

Do double-check that this has indeed happened, or make it a condition of your offer – if you want to minimise the risk of being gazumped, you might have to insist that this done.

That way, and assuming both the estate agent and the seller play by the rules, no-one else will be able to view the property, which will minimise the risk of being gazumped by avoiding a potential conflict of interest from competitive buyers.

But be aware that a seller will only do this if you are in a proceedable position. When we sold our last home, we had a nice young couple making an offer. However, they hadn’t even put their own house on the market.

Because of this, we only accepted their offer provisionally. This meant we kept our house on the market. Unfortunately, the young couple didn’t understand their position very well. They insisted that they would only put their house on the market once we had taken ours off.

We kept our stance and not long after we got another offer. It was slightly below what they had offered, but the buyer was proceedable. Because they didn’t understand their position, they lost a house they loved, as they said.

5) Secure a lock-in agreement

You could try to make the purchase agreement legally binding before contracts are exchanged by drawing up a lock-in agreement.

This is a deal made between the buyer and the seller for a fixed period of time guaranteeing exclusivity.

Typically, both parties agree to pay a deposit of, say, 2% of the purchase price, which will be forfeited if either side chooses to back out of the transaction.

Sajid Javid, former Housing Secretary, suggested this type of voluntary reservation agreement as part of an initiative to reduce gazumping problems in the housing market.

However, doubts remain over the practicality of such clauses and whether they are in fact legally enforceable.

6) Take out insurance

Finally, it is possible to take out home buyers’ insurance, which includes cover for being gazumped. If you want to make absolutely sure you won’t be out of pocket in the event of your property purchase falling through, this will take away the risk.

We took this route when we hired a solicitor with a ‘no sale, no fee’ guarantee. We were pleased we did too as we ended up having to pull out of our purchase and all the fees for the work done were waived as a result. We were then able to put the money into the new purchase instead.

How to minimise the risk of being gazumped

Gazumping is a frustrating and costly experience that can happen to anyone who is buying a property. To minimise the risk of being gazumped, you can take some steps to speed up the process and secure the deal. Here is a round-up of some tips to help you avoid gazumping:

  • Get a mortgage in principle: This is a statement from a lender that they are willing to lend you a certain amount of money based on your income and credit history. Having a mortgage in principle shows the seller that you are serious and ready to buy and can also save you time when applying for a formal mortgage offer.
  • Hire a solicitor and a surveyor: As soon as you have an offer accepted, you should instruct a solicitor to handle the legal aspects of the purchase and a surveyor to inspect the property to help minimise the risk of being gazumped. This will help you to complete the necessary checks and paperwork as quickly as possible and avoid any delays that could allow the seller an opportunity to accept another offer.
  • Communicate with the seller and the estate agent: You should maintain regular contact with the seller and the estate agent throughout the process and update them on your progress and any issues that arise. You should also ask them to keep you informed of any other offers or interest in the property, and to take it off the market once you have exchanged contracts.
  • Consider a lock-out agreement: A lock-out agreement is a contract between you and the seller that prevents them from accepting any other offers for a specified period, usually a few weeks. This gives you some security and peace of mind while you finalise the purchase. However, a lock-out agreement is not legally binding, and you may have to pay a fee to the seller or the estate agent to arrange it.
  • Be flexible and ready to act: You should be prepared to respond to any requests or queries from the seller, the estate agent, the solicitor, or the lender as soon as possible, and to provide any documents or information they need. You should also be flexible and willing to compromise on some aspects of the deal, such as the completion date, to avoid any disputes or delays.

By following these tips, you can minimise the risk of being gazumped and increase the likelihood of completing your purchase successfully. However, you should also be aware that gazumping is not illegal, and there is no guarantee that it will not happen to you.

Therefore, you should always have a contingency plan in case things go wrong and be prepared to walk away from the deal if necessary.

Buying a property is a big decision, and you should not let the fear of gazumping stop you from finding your dream home.


  • Jason Taylor

    Jason is a former estate agent who now splits his time between managing his own property investment portfolio and writing for Property Road.

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