Buying a home always has the potential to be a stressful and emotional experience but, if everything falls apart at the last minute, the whole ordeal can be much more hard-hitting, both emotionally and financially. At this stage, homebuyers will have had an agreement in principal and are likely to have become emotionally attached to their potential new home.
There are several reasons why the sale of a property can fall through at the last minute, but one pitfall probably well-known to most homebuyers is gazumping. Gazumping is when, through no fault of the buyer, a seller who has already accepted a verbal contract on the sale of a property with one party, accepts another offer from another buyer before the deal has exchanged. This can lead to a heartbreaking situation for any hopeful buyer, who may have already forked out on big expenses such as conveyancers, surveyors and mortgage advisors.
With 25% of sales falling though in this way, it is advisable that people buying a home take steps to protect themselves from such a situation. There is no way to completely avoid being gazumped (unless you live in Scotland, where it is illegal), but homebuyers can certainly minimise their risk by taking some valuable steps:
Get organised – Having all your affairs in order will help homebuyers reduce their chances of being gazumped. By having a surveyor, conveyancer and an agreement in principle all ready to go, it means you can get moving on the deal faster and the seller has less time to get cold feet, or become frustrated at the delays.
Many homebuyers ask the seller to take the house off the market as a condition of the sale. This makes it less likely that anyone else will see the property and reduces the chances of someone else making a more appealing offer.
Get it in writing – Or, perhaps, an even more effective counter measure is a legally binding contract between the buyer and the seller, signed when the offer is accepted. This usually involves both parties agreeing to put a percentage of the value of the house in a ‘security pot’. If one party reneges on the deal, the other party gets the pot. This is a fairly simple agreement, but make sure to factor in any potential delays when you’re getting it written up. These deals are only available for a set amount of time, so foreseeing any delays at the start can save heartbreak further down the line.
Pay a deposit – Probably one of the most effective ways of making sure a deal doesn’t fall through is adding in a non-refundable deposit. Not only does this show the seller that you are committed and serious about buying the house but it also has a psychological aspect, making the seller feel that the deal is set in stone. The seller will be more likely to take the property off the market straight away and this can also rank you above other bidders. Make sure you contact your solicitor or financial advisor before rushing into any non-refundable deals.
Get cover – Smaller steps can be taken to cover the costs of gazumping such as platforms like Plentific, an online property service who are able to offer a guarantee on work falling through. A free-to-use service, by hiring professionals through a third party, you will be covered at no extra expense, should such a situation arise.
One of the many benefits of joining Plentific is the Plentific Promise, which gives users a guarantee on the work they have had done by an approved professional. The property buying platform covers the most common reasons for a house purchase falling through; being gazumped or outbid, the property being withdrawn from sale, critical illness, or if the seller has no legal right to sell you the house etc. If the sale of a property purchase should fall through, the Plentific Promise gives homebuyers up to £1,750 of protection – covering conveyancing, surveying and mortgage lender fees. All homebuyers need to do is book a job with the company-guaranteed professionals through the free-to-use Plentific site.