12 Jun Gauzumping
Gazumping or ‘The G Word’ runs fear through most buyers down south but do property buyers up here in Scotland know about it! Over the last couple of years I have seen the Scottish market change and I believe it is becoming more similar to down South where Gazumping happens regularly.
What is Gazumping? – Loosely speaking it means another buyer puts in a higher more attractive offer after your offer has been verbally accepted. This could happen at any time from a couple of days after offer accepted up to a week or days before completion. Of course, if a higher offer is put forward it is up to the seller to decide on how they wish to proceed, in most circumstances the original buyer will be given the opportunity to increase or match the new offer. If however they cannot then the seller may decide to proceed with the new higher offer.
How does this happen? – It happens when the market is good and when there is a shortage of properties available. Demand is high and many buyers are offering on the same property. We have seen as many as 15 offers over the same apartment at closing date resulting in lots of disappointed buyers. It is in these circumstances when Gazumping usually takes place.
Why is this allowed once an offer is accepted? – It is possible because the sale is not legally binding until the conclusion of missives. At this point, a contract of sale/purchase exists. Prior to the contract being concluded, however, the seller can do what they want.
I often hear from friends that they have bought or sold within a week but in reality, their offer has been verbally accepted and will not have purchased until the conclusion of missives and completion. It is imperative that if you are buying that you act swiftly to push forward to the conclusion of missives as until then your offer is not safe.
Look out of next week’s blog giving advice on how to push a purchase through quickly!