When buying or selling your property in the UK, it is possible to outbid an offer once it has been accepted; however, only before contracts have been exchanged. “Gazumping”, as it is known, involves outbidding an existing offer and, although it is possible, it is not necessarily very ethical.
It also means that the buyer who made the original offer will be losing out, both on the time wasted and the money they will unnecessarily spend on fees.
Can Someone Else Make an Offer Once an Offer Has Been Accepted?
In England and Wales, it is still possible to make an offer once an offer from someone else has been accepted. This is known as “gazumping”. Legally, estate agents are obliged to put all offers forward; however, this does not mean that the seller has to accept the new offer. Once contracts have been exchanged, no new offers can be accepted; however, up until this point, people could still make an offer.
When you have an offer accepted when buying a house, this is “under offer” or “sold subject to contract”; however, neither of these are legally binding contracts for either party involved.
Can a Seller Accept Another Offer If They Have Already Accepted One?
There is nothing to stop a seller accepting another offer once they have already accepted one. The only time in which an agreement is binding is once the contracts have been exchanged. Estate agents, by law, must present any offers that come in. It is then up to the seller whether they want to accept any of these new offers.
What Are the Consequences Of Someone Else Making an Offer?
If the vendor does indeed decide to accept another offer, it will most likely mean that you are out of pocket. At a minimum, it will probably cost you the solicitor fees, search costs and maybe the surveyor fee. If you decide to try and match or exceed the new offer, this could also cost you more money and might be far more than you were originally prepared to pay.
How Can You Avoid Gazumping?
Gazumping can be extremely frustrating and, for many, can be viewed as unethical. It is a common problem and occurs frequently, especially in regions where the property market is more competitive. However, there are ways you could avoid gazumping or at least minimise your chances of being gazumped. These include:
- Selling your house before buying another house – if you have already sold your house, you are not waiting to sell and therefore do not come with an additional property chain. This means that your offer is more likely to be accepted quickly.
- Exchange contracts as soon as possible – the quicker you can accelerate to an exchange of contracts, the less likely it is that a vendor can accept another offer. You can push your solicitor to try and get this process moving as fast as possible.
- Become friends with the vendor – if you have a good relationship with the vendor, it is far less likely that they will gazump you. Use your home viewings as an opportunity to build a strong rapport with the vendor.
- Be prepared – there are many things that can slow down the process of property sales including issues with mortgages and slow solicitors. Make sure you have everything in place for a quick sale such as choosing a fast and reliable solicitor and organising your mortgage in advance – working with a mortgage broker could help speed up this process.
- Make your offer subject to taking the house off the market – estate agents should remove the property listing once you have made your offer. The more they are showing the house, the more likely it is that they will continue to receive offers.