One of the most interesting words I have learned is Gazumped – I somehow don’t think though it would be my favourite word should it ever happen to me but it is fun to say. Gazumping happens when you put in an offer for a property which is accepted then the seller accepts a higher bid at the last minute – before you exchange contracts and make the deal legally binding.
To see how this can happen you must understand that your offer/house purchase is not final until you exchange contracts, exchanging contracts solidifies your offer price and means that you will be taking possession usually within 2 and 14 days of a signed contract. This is meant to protect both the seller and buyer as either you can walk away from the deal right up until the minute you exchange contracts.
Gazmping happens when the seller comes back to you prior to exchanging and saying that they have been offered more money for the property so if you still want it, you will have to offer the seller more money. The problem here is that you have no way of knowing if the seller really has been offered more money as they do not legally have to prove it. You basically have to decide if you want the property bad enough to pay the extra money. The other issue here is that you are usually part of a ‘chain’ of other sellers/buyers so the fate of a few deals can lie on your shoulders.
Adrienne wants to sell her flat to the Queen, the Queen needs to sell her castle before she can buy the flat…Victoria Beckham offers to buy the castle so the Queen puts an offer in on Adrienne’s flat, Adrienne then goes and puts an offer in on Hugh Grant’s flat in Notting Hill. Just before exchanging contracts, Hugh tells Adrienne that someone has offered £10,000 more for the mansion. As Adrienne can’t afford the extra £10,000 she walks away from the Notting Hill mansion, she then has to tell the Queen she is no longer selling her flat and the Queen has to tell Victoria Beckham that her castle is no longer for sale meaning she has to head back to LA…see the chain?
Another real estate phrase that comes in handy here is ‘chain free’ if you have been renting a flat chances are you are ‘chain free’ which means you aren’t dependent on selling your place before you can buy another…so sometimes sellers will take a lower price from a chain free buyer to minimise the risk of people pulling out and the deal falling through.
Apparently now there is a new word to add to our English Real Estate Dictionary…gazundering. Due to the current state of the housing market in the UK buyers are gazundering, demanding a discount at the last minute.
We have heard enough horror stories of people losing out on flats at the last minute that I am pretty sure we are staying put as its the most chain free gazituation we can be in.