Navigating the property market can be tricky, especially with terms like "gazumping" thrown into the mix. Gazumping is a scenario that can leave both buyers and sellers feeling frustrated. But fear not! With a little know-how, you can steer clear of this property pitfall and ensure a smooth transaction.
Understanding Gazumping
Gazumping occurs when a seller verbally accepts an offer, only to later accept a higher bid from another buyer. Since offers aren't legally binding until contracts are exchanged, the original buyer is left in the lurch, and the seller must start anew with the new buyer. This can lead to delays and complications, making it a headache for everyone involved.
Why Sellers Should Be Wary
While a higher offer may seem tempting, gazumping can introduce significant risks. The new buyer might take longer with mortgage arrangements or legal processes, and there's always the chance they could back out. This could leave you stuck in a lengthy chain with no progress.
How to Avoid Gazumping Issues
Choose a Serious Buyer: Look beyond the initial offer. A committed buyer with finances in order may be a safer bet than someone offering more but unprepared.
Move Quickly with Paperwork: Once an offer is agreed, keep the momentum going. Promptly instruct your solicitor, provide necessary documents, and respond to queries to prevent other buyers from swooping in.
Communicate Clearly: Set expectations early. Make it clear that once you've accepted an offer, you intend to proceed unless something significant changes.
Consider a Lock-Out Agreement: In some cases, you can enter into an agreement giving one buyer exclusive rights to proceed for a set period.
Handled well, you can minimise the risk of gazumping and ensure your sale progresses smoothly. For expert guidance, consider reaching out to us at Bond Residential. We're here to help you navigate the property market with confidence.
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