Guest Post by: Homelyfe
Buying a home can undoubtedly be a stressful and tough time, not least due to the potential of the dreaded “gazumping”.
Our partner Homelyfe, the digital insurance company, has put together a guide to everything you need to know about gazumping, from people most at risk of being gazumped, to what you’re at risk of losing and how to protect your investment with Home Buyer’s Insurance.
What is Gazumping?
As a buyer, once you’ve had your offer accepted you might think it’s time to crack on with the furniture shopping. Unfortunately, there’s still opportunity for things to go wrong and the sale to fall through, not least due to the dreaded act of “gazumping”.
“Gazumping” is when someone else makes a higher offer on the house you are in the process of buying, and the seller chooses to go with their offer instead. Of course, this can be really disheartening, especially if you have your heart set on a certain property and lose it at the last minute. It’s not just the property that you lose, but you could lose hundreds or even thousands of pounds in legal and administrative fees too.
Unfortunately, gazumping is a lot more common than you may have realised. We surveyed 1,300 British homeowners and those who were looking to buy their first home with YouGov, and were surprised to find that home buyers have a 1 in 10 chance of being gazumped.
We also found that buyers purchasing a property worth between £100,000 – £250,000 were at the greatest risk of gazumping, and that the South East and East of England are the areas most likely to see buyers falling prey to gazumping. Not only do these buyers lose out on their dream home, but 53% lost money as a result. 32% of these people lost over £500, on surveys, legal and mortgage arrangement fees.
Is Gazumping legal?
A common misconception is that gazumping is an illegal practice. Whilst unfair, it’s still legal, but the Government is looking at ways to streamline property sales and deter both buyers and sellers from pulling out of a deal for no good reason. One proposal is that estate agents will be required to obtain a professional qualification and disclose payments for referring customers to solicitors, surveyors or mortgage brokers. These measures, announced by the housing secretary Sajid Javid, will discourage estate agents from taking part in gazumping.
How do I protect my pocket?
In the meantime, here at Homelyfe we offer Home Buyer’s insurance to protect your pocket when you are buying a home. A one-off payment of just £69 covers you for up to £2,250 in survey, search and mortgage arrangement fees. This means that you can have peace of mind when buying your new home, even if you fall prey to gazumping.
To protect your pocket against gazumping, visit Homelyfe.