- November 7, 2014
- No comments
During the big property booms at the end of the last century, there was a lot of discussion about altering the law on property transactions (such as those handled by AV Rillo), to end the practice known as ‘gazumping’. Is this still a problem?
What is gazumping?
At a time when property prices are rising fast, buyers such as AV Rillo clients may find that they make an offer for a property which is accepted, but the vendor then accepts a higher offer before contracts are exchanged. This is an expensive and frustrating experience for the buyer, as conveyancers such as AV Rillo understand.
The housing bubble
Gazumping is a feature of markets where prices are rising fast and the supply of property is restricted, as in the London boroughs where AV Rillo operates its conveyancing service. There have even been recent examples of ‘ghost gazumping’, where the seller invents an imaginary better offer.
Avoiding getting gazumped
The best advice given to property buyers such as AV Rillo clients is to be as ready to proceed as possible before making an offer on a house. Cash buyers, for example, can generally move faster than those waiting to arrange a mortgage, and buyers who can avoid being in a chain (perhaps by completing their own sale and staying in temporary accommodation) have an advantage over those who must wait for multiple transactions to be arranged. Increasingly, buyers are being advised to offer the vendor a non-refundable deposit to ‘lock in’ their offer before the exchange of contracts.
Efficient conveyancing – how it can help
When property prices are rising by thousands of pounds every month, a buyer’s best strategy is to do everything possible to avoid delays in the system, which will inevitably encourage sellers to think about accepting a higher offer from elsewhere. Using an efficient conveyancing solicitor such as AV Rillo is therefore of crucial importance in protecting a deal from collapsing because of gazumping.