You may have put an offer in on a property and started the property buying process, but are you worried about whether estate agents allow gazumping.
More importantly, does the estate agent you are buying the property though allow gazumping or not? But actually, there’s something very important about gazumping that you may not know, which is who ultimately makes the decision to gazump a buyer or not, which is revealed in this article.
Estate agents will allow gazumping, but the decision to gazump is not made by estate agents but by sellers. Estate agents are legally bound to put all offers and viewing interests forward, but it’s the seller’s decision whether to accept any new viewings or offers after already accepting an offer.
If you want to know whether gazumping is legal in the UK, please read this article about “is gazumping illegal?” The article includes 7 ways to avoid being gazumped too. These 7 tips might come in useful if you are worried about being gazumped, especially if you’ve been gazumped before.
Most would argue that gazumping should be illegal, but as it’s not, you are best to tackle it by doing everything possible to avoid it happening to you.
Gazumping is when sellers accept an offer on a property from a new buyer after already having accepted an offer from another buyer. The subsequent offer may be higher than the original offer or it may be from a buyer who can proceed faster, but either way the original buyer is left high and dry.
Who makes the decision about whether to gazump or not?
The final decision about whether a buyer is gazumped is down to the sellers, and although an estate agent may be partly to blame, it is down to the buyer whether or not they accept a new offer. Which is why it’s important to create rapport with the seller.
Whilst estate agents are legally obliged to put forward all offers to sellers, and for that matter to contact the vendors with new viewing interests, what happens next is partly down to how the conversation flows between the estate agent and the seller.
If the estate agent is actively pushing new viewings or being persuasive with any new offers, this may sway what the seller does next. But if the estate agents are against gazumping, they may try to dissuade the seller from accepting new viewings or from accepting a new offer. But either way, the final decision is down to the seller.
How persuasive the estate agent will be does depend on whether they know of feel that the buyers are wasting time, and whether they consider that they are not fully engaged in the buying process.
It takes no time at all for the estate agent to take a house off the market, so if it hasn’t been taken off the market after a couple of days after your offer is accepted, this increases your risk of being gazumped.
Is it OK to Gazump?
Whether it’s ok to gazump is a moral question, and I’d say no it isn’t okay to gazump. I was once in the position of being offered thousands more for a property, but I rejected the new offer as I’d already accepted another offer and the buyers had started the conveyancing process.
The answer you receive about the question “Is it ok to gazump?” will differ from person to person and their moral stand-point. But I guarantee that if anyone who says it’s okay to gazump will be the first person who complains bitterly when they are on the receiving end of being gazumped.
Often times people only think of themselves, and too often people don’t put themselves in the shoes of the other person. You cannot go wrong by using the expression “You can never be wrong by doing the right thing!” Which in this case is to not gazump.
There are always exceptions to any rule, and in the case of when it’s ok to gazump is if the buyers are time wasters and messing you around with various delay tactics.
But in this case, and before you gazump the buyers, it’s always best to give the buyers the opportunity to rectify the situation. Unless of course they’ve done something that is unacceptable.
Is it unethical to Gazump?
It is unethical to gazump, because gazumping a buyer means you will leave them out of pocket from costs they’ve incurred on survey fees, conveyancing legal fees, mortgage arrangement or valuation fees, which is not to mention the time they will have wasted.
Final thoughts about do estate agents allow gazumping
If you are worried about gazumping or being gazumped again if this has already happened to you in the past, speak with the estate agent concerned. Ask them what their policy is on gazumping.
Does the estate agent concerned actively encourage gazumping, or do they actively discourage it.
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Do Estate Agents Allow Gazumping: Is it OK or is it Ethical?
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Article written by Russell Bowyer who has been investing in property since purchasing his first commercial property in the 1990's for his own Chartered Accountancy business. But his first property investment project was to turn an old dilapidated restaurant into a large 5-bed home, which he purchased for £117,500 and sold for £450,000 (to see an "after" photo of the house before it was sold see here: About). Russell owns a number of investment properties, which includes houses, flats and HMO's. More recently he has turned his creative side to investing in property using lease options. His largest lease option deal to date was to acquire 12 properties worth over £2 million for just £12, which means he paid just £1 to acquire each property!
