Property being gazumped

NEProperty

Hi All, I am new the forum and needed some advice on a property deal which is being gazumped. 

I am 4 weeks into a BTL deal, where I offered the full asking price and this was accepted by the Estate Agent and seller. Overall I am more than £1,000+ into the deal, as have to paid valuation company, engaged solicitors and broker fees. I have also received a mortgage offer from the lender and solicitors have applied for searches. 

Last week the estate agent has rang to tell me that there is another buyer who has offered a higher price and whether I can do anything. Obviously very frustrating and annoying as I have spent so much time and money on the deal already. 

Now I am little confused on what to do. Whether I should offer more, if I do, the estate agent/seller may do a similar stunt closer to exchange. Has anyone had experience with gazumping and managed to secure the property still? 

For reference, the asking price was around £5k below the market average, but if I do offer £5k more, it maybe difficult trying to get valuation company to revalue property again. So money would come out of my own pocket.

Any advice on this would be much appreciated. 

MattMattMattUK

NEProperty said:

Hi All, I am new the forum and needed some advice on a property deal which is being gazumped. 

I am 4 weeks into a BTL deal, where I offered the full asking price and this was accepted by the Estate Agent and seller. Overall I am more than £1,000+ into the deal, as have to paid valuation company, engaged solicitors and broker fees. I have also received a mortgage offer from the lender and solicitors have applied for searches. 

Last week the estate agent has rang to tell me that there is another buyer who has offered a higher price and whether I can do anything. Obviously very frustrating and annoying as I have spent so much time and money on the deal already. 

Now I am little confused on what to do. Whether I should offer more, if I do, the estate agent/seller may do a similar stunt closer to exchange. Has anyone had experience with gazumping and managed to secure the property still? 

For reference, the asking price was around £5k below the market average, but if I do offer £5k more, it maybe difficult trying to get valuation company to revalue property again. So money would come out of my own pocket.

Any advice on this would be much appreciated. 

They will not need to revalue the property, the valuation company will have given the property a value, that just needs to be good enough for a mortgage lender.

Personally I would walk away, but then there is no way I would be getting involved in BTL at the moment, or even rental if the property was owned outright. 

ThisIsWeird

Hi NEP.

Assuming you know what you are doing in buying a BTL property, then what to do about this one comes down to cold, hard, reason.

Yes, it's utterly galling when this happens, but there is likely nothing you could have done to prevent it - this is your vendor's decision (a few extra £k in the sale price makes barely a jot of difference to the EA, so chances are the EA is as annoyed as you are).

So, sit down and look at it impartially. What position will you be in if you pull out? £1k lost, and the whole process to begin again. 

What position will you be in if you ask the EA to find out 'what figure will absolutely take it off the market'? Likely a few £k 'lost', but you'll have the place you put all the effort in to buying.

For both, you compare this property with others - see if there's any 'pull' either way. Ie, does this one still look a good deal for a few £k more, or are there a few similar but better value places out there?

And then there's the 'game' part of the whole caboodle! For instance, there is a chance that if you pull out, but politely leave your offer on the table 'should the situation change', the EA may well come back to you when the other buyer also pulls out for their own reasons. But that, obviously, is a lottery.

In essence, look at the whole thing un-emotively. It's all about getting the property you want. Not that the vendor is an arris.

Albermarle

Remember that the price is not the only issue.
Has the other buyer got proof of funds for example?
Also you have the advantage that you are close to being able to exchange.
The other buyer has not even started the process yet, and as said above they might pull out, or prove to be a not very straightforward buyer.

You do not say what this higher price is, will the EA not even give you an indication such as 'close to the asking price' or some other guideline? As said their priority is to get the deal over the line, and you are nearly there, so you might find them quite helpful if you keep friendly. 

propertyrental

How much flex is there in your business model?

What does another £5K do to your gross and net profits?

Without wishing to be rude, if you need advice from online strangers at the, the starting point in your business, are sure it's the right business.......