Homebuyers are being urged to protect themselves as the HomeOwners Alliance (HOA) warns that ‘gazumping’ has hit record levels.
Some 37% of buyers are being gazumped, up 6% in two years, the HOA says, as it calls for more to be done to reform the buying and selling process in this country.
Data provided by the HOA also reveals that 78% of property purchasers want to see the practice made illegal, owing in part to the fact that many buyers lost money – not to mention the emotional impact of having the sale pulled from under their feet.
Some 59% of buyers surveyed who were gazumped were financially out of pocket, with the average cost of a property falling through reaching £2,400.
HOA is now advising buyers to consider getting Home Buyers Protection Insurance to protect against gazumping.
The organisation says that for those who had to make a claim, the average amount they received was £975 in 2023/24, while the cost of the insurance started at £69.
Paula Higgins, CEO of HomeOwners Alliance, said: “The system fails consumers by enabling gazumping. If you take a look at property websites you will see many properties listed as sold subject to contract [sold STC], almost inviting other potential buyers to try their luck with an offer. And estate agents are legally obliged to pass those offers on to the seller.
“Unfortunately at the moment gazumping is still legal and sadly there’s not much you can do about it. That’s why we’re trying to raise awareness to consumers so they can at least protect their pockets from this unethical practice. We urge them to be prepared, move quickly, get home buyers protection insurance and where possible “lock in” the seller.”
Selling insurance product, what about one for vendors getting gazundered?
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This is part of a problem of buyer or selling messing about between agreeing the offer and contracts exchanging. Insurance isn’t the answer. Like most of the world, both sides need a legal agreement when an offer is accepted. The seller needs to take it off the market and the buyer needs to not view other properties. Mandatory Reservation Agreements will stop people messing around. At Cooper Adams we offer this, Gazeal deal with this for us.
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So you would be happy to get less for your home than you may have done?
An agents is legally bound to pass any offer on to avendor.
If the vendor opts to accept the higher offer that is their choice.
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All offers under a Gazeal agreement must still be put forward, if the seller decides to accept then they must pay compensation to their previous buyer under the terms agreed. Essentially as we have seen in over 5 years and 0000’s of agreements, it acts as a deterrent to gazumping, and of course, it works in reverse and deters gazundering
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37% being gazumped in this market? Where does this figure come from. Not sure we saw 37% in the crazy days post lockdown with the SDLT holiday? Gazundering is more of a problem at the moment I would suggest and even that’s not out of hand. Commentators seem to forget very quickly that we act for sellers not buyers and, as has been said in other comments, we have a legal duty to submit all offers to a vendor.
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