The downside of a buoyant market is that buyers are prepared to pay a premium to secure the right property.
Even if that can lead to a out-bidding (gazumping) process, leading people to obtain Gazumping Insurance.
The stressful experience of the most expensive purchase of a persons life, can turn distressing if gazumped at the last minute.
It can take months from an offer being accepted to exchange - during this time you ave vulnerable to the buyer accepting a higher offer.
You can take steps to minimise the risk:
6 Tips to avoid being Gazumped
1. Finance Preparation
Before making an final offer have everything ready to go this can include a Mortgage Offer if not at the least get a Decision in Principle from a Mortgage Broker.
Have your deposit sum is in one account ready to transfer to conveyancer and provide "proof of deposit"; you have checked your credit report to ensure its all clean; you have 6 months bank statements, payslips and had your ID and proof of residence certified at the post office ready to provide to Broker and Conveyancer.
2. Find a GOOD Conveyancer
Have a conveyancer lined up; one recommended from your broker may work with them quickly for an efficient process. Once your offer is accepted - instruct them to complete the searches and start communication with the vendors conveyancers.
You really want a recommended conveyancer as those with "Quick" in there name can be the slowest! You can ask Bespoke Finance to Find a Efficient Conveyancer and provide a free quote.
3. Clear Communication with The Estate Agent
Ensure the estate agent knows you are serious; you can state that your offer is conditional on the property being withdrawn from the market, to leverage your offer to make them remove it off of the market. This may not be fruitful if the property received high amount of interest.
You can also ask your broker to provide them with a Decision in Principle certificate to provide confidence to the Agent and the Vendor.
4. Lockout Agreement
You could offer a non-refundable deposit to secure a lockout agreement. You need to make sure an experienced conveyancer handles the agreement.
If you fail to proceed then you can loose the deposit but if the vendor backs out you can obtain funds via the contract to cover your looses.
5. Chain Free
You may want to consider being chain free when you make the offer. If you currently own a house, you could sell this first and move into rented property before starting the search for your new home.
6. Exchange Quickly
Instruct your solicitor and surveyor immediately and do everything possible to speed up the process – as it’s only once you've exchanged that there’s no possibility of being gazumped.
7. Obtain Gazumped Insurance
If all else fails; you can obtain Gazumped Insurance to cover your costs up to £1,500 with a fixed fee of just £79.50.
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I think the "Lockout Agreement" is most effective if you can get one. Any more suggestions? - apart from quick, quick, quick!
See Also: £79.50 - Gazumping Insurance up to £1.5k