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More than a third of buyers report gazumping

  • 11/06/2024
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More than a third of buyers report gazumping
Around 37% of buyers are being gazumped, a rise of 6% from two years ago, according to a survey.

According to the HomeOwners Alliance (HOA), which used MFS Group figures, 59% of buyers who were gazumped lost money, with the average cost of a property falling through coming to £2,400.

Gazumping is when sellers accept a higher offer from another party after they have already accepted a buyer’s offer.

HOA said that the home buying and selling process was “flawed”, as the purchase is not legally binding until contracts have been exchanged, at which point the buyer has already stumped up significantly, financially and emotionally.

Fees paid by this stage include mortgage and conveyancing fees, property surveys and local searches.

The HOA says that it “consistently” hears from customers who have been gazumped, sometimes more than once, and want a “legal foot to stand on”.

More than three-quarters of those surveyed by MFS want gazumping to be made illegal.

Currently, the HOA recommends getting homebuyer’s protection insurance, which allows some costs to be recovered if you are gazumped. The average claim amount was £975 in 2023/24 and the cost of insurance starts at £69.

It added that buyers should be in a position to move the sale along quickly and have a mortgage agreement in principle (AIP) in place and a solicitor lined up with necessary documentation to minimise delays.

The HOA said that buyers should try to get to the point of exchanging contracts quickly so it is legally binding, ask for the property to be taken off the market once the offer is accepted and ask for a lock-out agreement stating the buyer had the exclusive right to buy the property over a certain time frame.

Paula Higgins, the HOA’s CEO, said: “The system fails consumers by enabling gazumping. If you take a look at property websites, you will see many properties listed as sold subject to contract (sold STC), almost inviting other potential buyers to try their luck with an offer. And estate agents are legally obliged to pass those offers on to the seller.

“Unfortunately, at the moment, gazumping is still legal, and sadly there’s not much you can do about it. That’s why we’re trying to raise awareness to consumers so they can at least protect their pockets from this unethical practice. We urge them to be prepared, move quickly, get homebuyer’s protection insurance and, where possible, ‘lock in’ the seller.”

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