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Success and failure

Preventing gazumping

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Gazumping is an unavoidable occurrence. However, there are things that can be done to minimise the risk of it happening to you:

Help speed up the sale
Anything that you can do to minimise the length of time between agreeing the sale and exchanging the contracts reduces the opportunity for gazumping. Pre-qualifying with your mortgage provider and appointing a solicitor before your offer is accepted are two things you can do to help the sale go through quickly. Putting some gentle pressure and encouraging urgency from those people involved in the sale is another.

Manage your relationship with  the agent
First up, check to see if the agent has a policy on gazumping. A surprising number of them do, and will not allow it as a practice. They may insist that the seller signs a written agreement to turn down any offers once one has been accepted.

Aside from this, you should stay in regular contact with the selling agent and update them as you reach key stages, such as completion of the survey and a formal mortgage offer. A constant flow of information will help them feel comfortable that the sale is progressing, whilst an information blackout could make them uneasy, regardless of whether things are actually moving forward.

Protect yourself
Drawing up a pre contract exclusivity agreement between yourself and the vendor is a sure-fire way to prevent gazumping. You can specify a sum in the contract that the vendor would have to compensate you with. Use of these agreements is uncommon though, as you have to pay to get a solicitor to draw one up, and not too many vendors would be willing to sign one.

A lockout agreement is similar to an exclusivity agreement in that it should prevent the vendor from accepting another offer. The difference is that the agreement will only run for a set period of time.

You can also get insurance that covers you against the deal falling through. Though this is another potentially needless expense that won't help your timing, money is often a good compensation when things go sour.

In addition to these measures, the government is planning the introduction of a seller's pack which should hopefully speed up the homebuying process and thereby reduce the length of time in which gazumping is possible. This information dossier will become a mandatory requirement of anyone putting his or her home on the market. It will include a basic surveyor's report and the results of local authority searches - both of which are currently the buyer's responsibility.

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