How to avoid being Gazumped

So, you’ve made an offer on a property. You may well have had to negotiate a bit – after all, the market is improving here on the Isle of Man – but that’s OK because this is YOUR perfect home. You’ve had your eye on it for ages. You can’t quite believe you’re now this close to buying it. And you can’t wait to move in. Hang on a minute. Something happens that you weren’t quite expecting. You get a call from the estate agent telling you that unfortunately the seller (whom you took to be honourable) has received a higher offer from someone else, another buyer. Really!?

What do you do next? In reality your choices are limited. The vendor has your attention and in all likelihood, somewhat over a barrel. Either you match the revised offer or you beat it. If not, you withdraw from the purchase. Either way, you, Mr./Mrs. Buyer, lose. And even if you do offer more, there’s no telling whether the other party might offer higher still starting a bidding war with one eventual winner.

The better agents do not encourage gazumping. We are, however, obliged by law to put forward each and every offer received for a client’s property. In writing in some cases. The vendor then decides how to proceed.

There is little you can do to repel a determined bidder but there are ways you can reduce the likelihood of it happening to you.

Firstly, you could offer the asking price for the house, subject to any conditions you might wish to include like, for example, mortgage survey. Subject too, to the property being withdrawn from the market. This will prevent it from being shown to other would-be buyers. You could go further than this and purchase a formal right of first refusal from the vendor which would include the vendor instructing the agent in writing not to submit any further offers. This is rare here on the Island given we all place a significant degree of trust in the people we deal with in our community.

Lastly, only offer to buy a property when you are in the strongest possible position to do so.

Keep in touch with the selling agent and your solicitor.

Maintain the momentum with the sale. Don’t give the seller, or their agent, any reason to contact you to ask for a progress report. Delays cause uncertainty.

Make sure your mortgage offer is confirmed in writing. We all have to work hard to secure our dream home, even the buyers!

If you would like any further information or advice, feel free to call us – anytime! We’d be happy to help.

Tim Groves
Black Grace Cowley

tim@blackgracecowley.com
(01624) 645555


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