The word ‘Gazump’ can strike any buyer with fear.

Approximately 31% of UK transactions fall through each year.* Of these 21%* of buyers were gazumped – losing the property due to the vendor accepting a higher offer from another buyer.

Given there are over 1m annual transactions, gazumping accounts for over 60,000 transactions falling through.

Other reasons for failed transactions included:

• where the seller decided not to sell their home
• buyers being unable to complete sales on their own homes
• buyers finding an alternative home to buy

Gazumping is more prevalent in a buoyant property market when vendors are in a strong position. It isn’t always about more money. Sometimes buyers can get caught in a protracted buying process which means the process can be more susceptible to things going wrong.

What can you do to protect yourself from Gazumping?

1. Be as ready as you can be at the outset, for example getting finances organised. Or ensuring you have the ‘right’ professional adviser for the type of transaction you are conducting. A process-driven online conveyancing house is not likely to be the best adviser for a Title split or an Options deal.
2. Request a Lock-out agreement, if you can get a vendor to agree to it. The benefit is, it gives peace of mind about timeframes to the vendor as well as the buyer. The predictability means everyone can plan their lives around move dates, so the transaction is far less likely to fall through. The penalty is whatever the financial commitment has been agreed in the Agreement.
3. Or Exchange early, say with 1% deposit (although typically this would be 10%) to secure and lock in the deal. Speak to a Solicitor about any special conditions e.g. subject to survey findings.
4. Do your Due Diligence up front – researching the area and property as much as possible before waiting for a lawyer to check it e.g. buy the Title Deed from Land Registry to verify ownership, check historical pricing and check boundaries. Or asking for a management pack for leasehold properties.
5. Go for speed of transaction – which gives less time for the transaction to falter
6. Build vendor rapport so there is a human commitment and get the property taken off the market immediately. Strive, wherever possible for a transparent transaction, so you are aware of every development in a timely fashion. 
7. Indemnity insurance or Homebuyer protection insurance can protect against wasted fees spent on surveyors and searches
8. Buying at Auction can help address the gazumping because all the buyer’s information is provided up front and the accepted offer is binding. Although there are risks with buying at Auction, so be informed and go in with your eyes open.

Different buying models protect against Gazumping

Scotland’s property investing and buying process

Gazumping is rare in Scotland. Solicitors are bound by their professional body (Law Society of Scotland) which bans the practice of Gazumping and are often involved with the marketing and selling of properties, rather than just the estate agent. Although gazumping can still occur with smaller boutique agents.

In Scotland a Home Report is provided by the Vendor, a bit like preparing the sale for auction in England and Wales. It contains a floorplan, an EPC (Energy Performance Certificate of up to 6 month’s old), a Gas Safety Certificate, a Survey by a RICs-qualified surveyor, as well as the Utility Providers.

The former Home Information Packs (HIPs) helped in England and Wales , providing EPCs and the Vendor’s questionnaire, but they fell into disrepute and only the EPCs have survived.

N.B. *a specific Sprift, A Which? survey of 2,000 homebuyers in February 2016 showed 28%, but more recent estimates are higher

I work with time-strapped Professionals, Expats and Entrepreneurs who don’t have the time or local presence or have gaps in your know-how, to build property portfolios in the right way for you. Or who are simply stuck with little progress. This means you can carry on with your day-to-day life without spending a disproportionate amount of time getting sucked into investing.

If you want to talk through your plans and get clarity then please get in contact by telephone +44 (0)1932 849 536 or contact us

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Property Venture® is an award-winning, Boutique investment property specialist that provides a bespoke sourcing service for time-strapped entrepreneurs and expats. Having landlord, investment and development experience means we know how to help you build wealth through property with less risk and more clarity.

Disclaimer: Property Venture® is not offering advice. It has outlined information in layman’s terms for the reader to be better-informed.

With regard to in-country legislation, letting licences and taxation laws, then you must take appropriate legal or taxation advice during your purchase process, at which time your solicitor or advisor will discuss with you up-to-date legislation and costs.