With the Market heating up, now might be a good time for tips on how to avoid being Gazumped
As agents, we have a legal obligation to put EVERY offer we receive on a property to the property owner. Even after an offer has been accepted by the owner, if another offer is received, it still must be put to the owner. If the owner decides to renege on the original deal and proceed with the new (often higher) offer, that is called Gazumping.
A Solicitor or Conveyancer is responsible for securing the property for you, by Exchanging contracts. Some purchasers are taking a long time to achieve Exchange now, which puts them at risk of being Gazumped.
Exchanging contracts is the only thing that will protect you from Gazumping.
Once contracts are Exchanged, the property is virtually yours. No new offers can be considered by the owner, the property is Sold.
To avoid being Gazumped you need to work through this list as quickly as possible to secure the property for yourself.
Here's some Tips to help you along ..
1. Pay a Good Faith Deposit. It won’t hold the house for you - but it shows that you are serious. $1000 will do - and it comes off the purchase price. (It is usually refundable if you do not proceed)
You will need to provide your Real Estate Agent with your full legal name (for the Contract) and the name of your legal representative. Then contact your Conveyancer and instruct them.
2. Organise Pest and Building Inspections. Ask the inspectors to attend asap and call you straight after. If you get the thumbs up and you’re happy to proceed, contact your Conveyancer immediately.
Contact your Financial Institution and provide them with the information they need. They’ll need to arrange a Valuation so pass on the Agent’s number too. Stress that you need it done quickly.
3. Tell the Agent when you have received your Formal Financial Approval, then arrange to have the remainder of your deposit transferred into the Agent’s Trust Account
Once the Agent has received the remainder of your deposit they will contact both conveyancers to confirm, so Exchange can take place. Properties rarely exchange without the full deposit.
There is an unwritten rule, allowing a Purchaser 7 days grace to achieve Exchange on a property. During that time the Owner may agree
not to actively promote the property. This is not applicable in every circumstance and cannot be relied upon in a strong Selling Market like this.