Can someone else make an offer on a house after you’ve had one accepted? Yes, they can.
It’s the call no one wants to get. Just when you’re starting to ponder furniture and paint colours for your new home, you hear that someone has put in a better offer on the property, and the seller has accepted.
When this happens, it’s known as “gazumping”. And it’s pretty common – a 2019 study showed that nearly a third of UK homeowners have been gazumped.
Though it might (understandably) feel unfair when it happens to you, gazumping is totally legal in the UK. Here’s how it can happen.
In England and Wales, the agreement to buy or sell a property isn’t legally binding until you and the seller exchange written contracts. The verbal agreement you made when your offer was accepted doesn’t legally commit either of you to the sale.
But the exchange of contracts happens quite late in the home buying process – often weeks or even months can go by between making the offer and being ready to exchange. During that time, you’ll be applying for your mortgage and organising a property survey, and your conveyancing solicitor will be taking care of all the legal work involved in the sale.
It’s in this window that gazumping can happen. If there are any new offers on the property during this time, the estate agent has to pass these on to the seller. And, in many cases, the seller is tempted by a higher bid on their property from another potential buyer.
It may not always be about the money, either. If there are delays at your end – like with getting a mortgage offer, for example – and the seller starts to run out of patience, they may feel that someone with a new offer can close the deal more quickly.
Being gazumped can be a heavy blow. Not just because you’ve missed out on a property you liked, but also because you can be left to foot the bill for non-refundable mortgage, survey, and solicitor fees.
Gazumping doesn’t happen as often north of the border. However, if you’re trying to buy property in Scotland, being gazumped is still possible.
In Scottish property law, the buyer and seller aren’t legally obliged to go through with the sale until the “conclusion of missives”.
The “missives” are a series of letters between the buyer’s and seller’s solicitors, which make up the contract for the sale. At the conclusion of missives, the contract is agreed, and the sale becomes legally binding. So, gazumping can happen before that point.
Still it’s very rare. That’s because most Scottish property sales are handled by solicitor estate agents, who are bound by strict rules from the Law Society of Scotland.
Within these rules, once the seller’s solicitor has accepted an offer on their behalf, the solicitor can’t accept another offer. If the seller wants to go with a new offer, that means their solicitor can’t act for them anymore, and they have to find someone else to represent them.
Obviously, this is inconvenient and involves extra expense, so it’s an effective way of discouraging gazumping.
You can never completely remove the risk of being gazumped when you’re buying a property, but there are some things you can do to make it less likely.
Try asking this at the same time as you make your offer. The seller isn’t under any obligation to do it, but if they’re confident that you’re a serious buyer, they should agree. Once the property is no longer being advertised, there’s much less chance that a higher offer will come in and beat yours.
The quicker you can move from making an offer to exchanging contracts, the less time there’ll be for someone else to gazump you.
Try shopping around for solicitors and surveyors in advance, so you can start the ball rolling on conveyancing and the survey straight away. Likewise, getting an agreement in principle (AIP) from a mortgage lender can give you a head start on your full mortgage application.
Keep in touch with all the professionals involved in the sale so you’re informed about what’s going on (and can give people a prod if necessary!).
An even simpler way to speed things up? You can use Habito’s complete home-buying service. We sort out the mortgage, conveyancing, and survey – plus, you get a personal case manager to make sure everything is moving at the speed it should.
Building up a good relationship with the seller could make all the difference when it comes to gazumping. If they like you and understand how much you love their property, then they might think twice about accepting another offer.
Plus, you can keep them informed about how the sale is going, so they can be confident that you’re making progress.
It’s not exactly a way of avoiding gazumping, but taking out homebuyer protection insurance could soften the blow a little if the worst happens. If you’re gazumped, this type of insurance will cover some of your costs (from the survey, solicitor, things like that).
If, despite your best efforts, you end up being gazumped, here are your three main options:
You might lower your risk of getting gazumped with Habito Plus, our complete home-buying service. We handle the mortgage, conveyancing, and survey, and you can monitor progress on your own personalised dashboard.
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