Gazumping in the UK housing market - Information from Mortgagesorter

This is where the seller has accepted your offer but then takes a higher one. B*$*&*Ds. You thought you were safe.

The Estate Agent is legally bound to pass on all offers to their client, the seller and, of course, the higher the offer the bigger their commission...

A favourite trick of the trade is to pretend there's been a higher offer at a crucial moment just to see if you'll raise your offer... Nice!

Gazundering - on the other hand - is the opposite of gazumping - where the buyer tries to get the seller to accept a lower offer just before contracts are about to be exchanged.

To avoid being Gazumped:

Ask that the property is taken off the market. If they know you're ready ie you have a mortgage in principle and are serious then the seller should agree to this.

But there's no real guarantee that competitors will be kept away, especially if the house is in demand.

A lock in agreement (aka a lock out or preliminary agreement or exclusivity agreement) could be made at this stage. This commits both parties to exchanging in a certain time.

If either side changes their minds about the sale during an agreed period or, say, tries to change the price without good reason then they lose their deposit - usually to the other party, or perhaps a charity.

(Each possible reason should be pre-agreed eg if problems are found with the survey and so on.)

The "lock out" name derives from the sellers agreeing not to offer it to anyone else for a defined period.

These agreements can cost more money in legal fees but should give invaluable peace of mind at what is a very stressful time.

Note that if your solicitor doesn't like the idea then it might be an idea to look elsewhere for legal advice.

Their reluctance might only be because these agreements are relatively uncommon and your solicitor may not know how to write one. They may not admit this so, unless they can give you good reasons why not to do one, think about shopping around for someone who is willing and able.

These agreements usually last for 10 days. They should start from when you receive the contract, not from when the offer is accepted.

The sellers could worm out of the agreement by delaying sending you paperwork, but this could also be dealt with in the agreement.

Insurance can be bought to pay you an agreed sum to cover your lost costs if you're gazumped.

Read enough? Just want a quote? To get your best mortgage quote quickly and easily we can put you in contact with a recommended mortgage adviser. It's free, completely confidential and there's no obligation at all. Simply fill out the form below

Important note about your credit rating

Many websites don't make it clear that filling in their mortgage enquiry form means you might be credit checked.

This can put you at risk.

UK Mortgage lenders may assume an enquiry you have aleady made to another lender means you were turned down - and not that you are in fact carefully shopping around and rejecting the bad deals.

The best way around this significant problem is to ask an independent mortgage adviser to make anonymous enquiries for you.

Without risking your credit score an adviser can find you the best available mortgage deal. They will also know how likely you are to be accepted by the lender if you decide to make a formal application.

If you would like a recommended adviser to check out the best deals for you, anonymously, simply fill in the quick form below.

" Hmm..." You might think; "Won't I be hounded by a salesman hungry for my business? "

This is the most common question we hear from our users.

The answer is no you won't.

Firstly your enquiry is only passed to ONE person on a carefully vetted list of independent advisers.

Secondly, these mortgage advisers are professionals. Even when the market is slow they are busy people. There many people who need to move homes, or get a remortgage and are looking for advice all the time. Regardless of the state of the property market, life goes on.

So the advisers don't have time to hassle people. It just doesn't work like that. No one is gong to be forced into taking out a mortgage unless they really need one.

The advisers are very used to talking with people, perhaps like yourself, who are only "dipping their toes" into the water.

Many people just want an initial quick chat and if they feel comfortable will ask the advisor to contact them again later - often in several weeks or months. As a professional, the adviser will simply diarise this and call back at the appropriate time. There is no obligation at all.

(In the unlikely event that you ever feel at all "hassled" by someone on our list please let us know immediately. We have never heard of this. But if it happened we would definitely want to know).