Reducing gazumption chance

Mishomeister

Is there any way to reduce the risk of being gazumped. As a first time buyer I am interested in the same type of property as many Buy-to-let cash buyers are(repossessions) and as a Mortgage Adviser I know it is a very common thing to happen. Any ideas? Such as making 2 mortgage offers a the same time saying should seller decides to accept higher one there is a condition to cancel all viewings due and take place off the market?

Any ideas?

FireWyrm

Its pretty standard proceedure to make your offer conditional on removal from the market. Otherwise, there's little you can do to forstall gazumping other than to act quickly in the process and ensure it moves cleanly and quickly to completion.

That said, in today's market...do you really think gazumping is a problem? My experience recently is that sellers are desperate for an offer, any offer.

Mishomeister

FireWyrm wrote: »

That said, in today's market...do you really think gazumping is a problem? My experience recently is that sellers are desperate for an offer, any offer.

In London reposessed properties sold quiet below market value go in no time. And loads of young people like myself do get gazzuped by greedy Buy-to-Let cash buyers

Mobeer

Ask them to stop marketing, persuade them you have the finances to complete, and proceed as quickly as possible to exchange contracts.

Davesnave

Mishomeister wrote: »

In London reposessed properties sold quiet below market value go in no time. And loads of young people like myself do get gazzuped by greedy Buy-to-Let cash buyers

Of course, if you were the person who'd been repossessed and owing thousands, you'd perhaps be glad that these "greedy cash buyers" were interested. It's a matter of perception.

The agents acting for the lenders have a duty to get the most they can, and that means continuing to market the property after an offer has been accepted until the point of exchange. You are unlikely to be able to barter with them, because what you're suggesting won't allow the market to decide the final price.

googler

The former housing minister was asked in parliamentary questions if he planned any action to eliminate gazumping, and his replay was quoted as follows;

"Home buyers and sellers in England and Wales are free to choose from a range of options, including some which give more certainty that their transaction will be completed.

“These include ‘lock-out’ agreements, where the seller enters a binding agreement not to accept another offer within a certain period; ‘option to purchase’ where the seller grants the buyer a binding option to purchase the property at the agreed price within a set timescale; ‘conditional contracts’, where buyer and seller enter into a contract as soon as terms have been agreed, subject to certain conditions being satisfied; or ‘costs guarantee’, where both buyer and seller agree to pay the other side’s costs if they withdraw from the transaction.

“Given the flexibility of the present system, we have no plans for reform in this area at the present time.

“Home Information Packs, introduced under the last administration, were originally supposed to help tackle gazumping.

“In practice, they did no such thing as they were not trusted by buyers, and merely deterred sellers from putting their homes on the market. This is why the Coalition Government has abolished the requirement to have a Home Information Pack, saving home buyers and sellers from the unnecessary regulatory cost.”"