Ethics of Gazumping a cash buyer who's an investor?

Splodges

So I've had my first starter home flat for 4 years now (2x2 year fixed terms), I've built up a good bit of equity to upgrade. I really do need a bigger home as it's too small, I'm getting older and it has a raised loft bed area that's awkward to get up to. My fixed term comes to an end in 3 months. 

I saw a property I really liked which was the only one in the area I was interested in and offered £190k, there was another buyer in the region of £180k from what I understand. They are paying cash and are an investor looking to rent it or flip it I assume. 

My property wasn't on the market but ready to go on next week, I believe it's quite sellable at the price I'd need to get for it. So I do understand myself not being immediately proceedable and the choice to sell to the cash buyer however their offer is quite a bit lower than what the seller was hoping for. 

I was considering getting mine on the market, if I find a buyer for the price I would need, to then offer another £5k on top of my previous (so 190k, 15k over the buyers bid.)

I've recently learned this is termed as "gazumping" and is frowned upon, however I feel like my feelings on the ethics of doing it is different because of the buyer being an investor just looking to make money from it rather than a home someone is looking forward to living in. 

The seller had said if their offer falls through I will be the first to know and she'll take my 190k. I don't know if it's worth just waiting to see, but I feel like cash buyers will drop out less often than someone relying on a mortgage.

Thoughts/opinions please? 

Doozergirl

They won't take your offer because you aren't proceedable.  Not even on the market, it was a fantasy to make an offer.  You will not have been taken seriously at all.  

Find a buyer first. 

You can then try your original offer if you want, and then try more, but be prepared to be disappointed.   

Cash buyers are no less fickle than those that need a mortgage, by the way. 

By the time your place sells there will probably be another suitable one for you.  

Splodges

Doozergirl said:

They won't take your offer because you aren't proceedable.  Not even on the market, it was a fantasy to make an offer.  You will not have been taken seriously at all.  

Find a buyer first. 

You can then try your original offer if you want, and then try more, but be prepared to be disappointed.   

Cash buyers are no less fickle than those that need a mortgage, by the way. 

By the time your place sells there will probably be another suitable one for you.  

Yeah I was aware about the being proceedable at the time, that's why I was considering waiting until I had an offer on mine then offering £5k more (£15k more than the investor)

Bigphil1474

Why would you offer another £5k on top when they've said they'd take your offer if you were proceedable? You're getting your cart before the horse. I would concentrate on selling your property first. That might take a few days or a few months. Once you are sold, see what's available then.

Splodges

Bigphil1474 said:

Why would you offer another £5k on top when they've said they'd take your offer if you were proceedable? You're getting your cart before the horse. I would concentrate on selling your property first. That might take a few days or a few months. Once you are sold, see what's available then.

Just realised I'd left out that they had accepted the lower £180k offer in my original post. My mistake for not making that clear. The idea being they might reconsider taking my offer if it was worthwhile 

user1977

It's the seller who really has any ethical dilemma, potential buyers can make whatever bids they like.

Albermarle

They are paying cash and are an investor looking to rent it or flip it I assume. 

You can not just assume that. Cash buyers can also be people looking for a home, and investors will often need a mortgage.

As above Gazumping is what a seller does to an already committed buyer. ( possibly by using info about new bids) . It is seen as a bit unethical but until exchange of contracts, nothing is fixed.

Buyers can also drop their offer at the last minute, just before exchange. A process known as Gazundering.

Herzlos

There's no harm in making an offer and being honest about your state of affairs. There's always a risk that the other buyer will muck the seller about or try and drop the price so having you as a fall back might work in your favour. There's also no harm offering a bit more to sweeten the deal.

But you should get your flat on the market as soon as possible anyway, either for this or another property later.