If your offer is accepted this should be put in writing.
The important thing to bear in mind at this stage is that you’re still not home and dry.
You can spend money on the valuation / survey, solicitors fees etc. and then find you’ve been gazumped and have to start all over again. Welome to Paranoia City.
Gazumping is where the seller has accepted your offer but then agrees to sell to another buyer for more money.
Aaaargh !!. 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…
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.
You must get this in writing – or it really is meaningless.
Here’s how a Lock-in agreement works
The buyer and seller agree to pay a deposit – often 2% of the house price.
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.
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