How to avoid being gazumped is a major problem for any house buyer. It doesn’t matter whether it is an investment property, or your own home, the risk of being gazumped is a major consideration for all.
However, this can be a particularly regular occurrence for the novice property investor. Because property investing is a business similar to any other, investment property is sought at the cheapest price possible. This regularly means that property is being bought at between 20% – 40% below market value.
Therefore the offers made by property investors are normally by there very nature, lower than normal and hence ripe for someone to come along and make higher offer.
One of the biggest lessons a beginning investor can learn is how to avoid being gazumped. The reason this is, is that for a novice to even be gazumped once in their first few property deals, can be disastrous. So the ability to be able to stop getting gazumped could be mean the difference between success and failure.
Imagine spending hours and hours researching your first deal, paying survey and solicitors fees, maybe even a finders fee only to be gazumped at the last minute. In real terms it may not be the financial loss that wipes out the beginner, but the discouragement of spending months trying to get their first deal up and running and having it taken away at the eleventh hour.
This agreement will specify that the vendor will not accept an offer from another buyer during a specified time period. This time period would normally be between one and three months, you would agree the time scale with the vendor in advance.
Any good investment solicitor should be able to draw up an effective contract/agreement. However, it could cost you a few hundred pounds initially, but once drawn up once it should be easy to adjust it to cater for future agreements in the future.
So, yes you to can avoid being gazumped and you can even have the agreement so detailed as to specify that the vendor is not allowed to offer viewings of their property to other potential buyers, without your consent.
BINGO! You now have enough time to carry out any searches you want and to do any other due diligence. You now have plenty of time to get to exchange without the risk of being gazumped.
Another way to stop yourself being gazumped that is probably used more widely than an exclusively agreement is an option agreement.**Nothing on this website should be confused with financial or legal advice. If you need this, or any other type of advice, please seek the help of a competent professional. In addition, because real estate laws change all the time and differ from state to state, and even city to city in the same state, everything in these pages should be considered general marketing advice and ideas. Please see link to full Disclaimer at the bottom of this page.