Sam Dunn: 'Why have we been gazumped now?'
Wednesday 01 July 2009
Question: There may well be a housing slump but, incredibly, we've been gazumped twice in the past month on homes we're looking at; each time, by a considerable sum. Is there anything we can do?
Answer: Can it really be back already? Gazumping is a bête noire for homeowners close to exchange who – ready to move in having spent thousands on surveys, legal fees and local searches – suddenly find themselves trumped at the last minute by a rival with a higher offer.
Yet the practice, entirely legal to the chagrin of many frustrated buyers, tends to emerge only during boom times when a mix of rising incomes, buoyant house prices and economic confidence fuel enthusiastic purchases. So what's it doing rearing its head in the depths of recession-struck Britain?
It turns on several factors, say estate agents: a small supply of desirable homes; robust demand from those with ready cash; pent-up first-time buyers; and tentative confidence that the worst of the house price slump may be over.
A survey from Knight Frank estate agent unearthed such sentiment as it recorded a 1.6 per cent rise in central London property prices.
Blaming a lack of supply of high-end properties, Liam Bailey, from Knight Frank, says that "the result of this imbalance is that gazumping is back, with the sealed bid system being used again for the first time in 18 months".
For now, at least, gazumping looks likely to remain a practice affecting only the few most desirable homes; whether it's those closest to the best schools or on offer at the most competitive price for a quick sale.
"As you've been caught out twice, it is worth taking precautions so you don't lose out financially – and emotionally," says Mark Harris of Savills Private Finance.
"If you have your mortgage arranged in principle and don't have to sell a property to enable you to buy, you're in a very strong position so insist on the vendor signing an exclusivity agreement, promising to sell the property to you."
"It's also crucial the agent stops marketing the property, so check – and insist on that," Harris adds.
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