Want to avoid Gazumping? – Look to auction.

You may have seen press reports over the weekend about how the Communities Secretary Sajid Javid wants to clamp down on gazumping to help make buying a house easier and cheaper. I was really pleased to see this being talked about so widely as it’s an obstacle we’ve been having to tackle for many years and is something that far too often can cause a sale to collapse.

It’s one of the reasons I love working for an auction business – we avoid gazumping entirely.

To explain, gazumping happens when a seller has verbally agreed a sale price for their property but then later accepts a higher offer from another purchaser subsequently meaning the original buyer loses the property. It can also occur when a seller raises the asking price at the last minute after previously accepting a lower offer.

With an unconditional sale by auction the exchange takes place on the fall of the hammer in the auction room. The buyer pays their 10 per cent deposit and the sale is secure making gazumping impossible. Who doesn’t want that?

Once contracts have exchanged, the sale is legally-binding and a deposit is paid meaning the buyer cannot pull out of the sale and the seller cannot agree a sale with another party.

Currently with private treaty sales, the exchange of contracts usually only takes around 12 weeks or more after the initial verbal offer has been accepted. That’s three months for the seller to potentially accept another offer and break the sale chain. A concern in any sale.

With our sales by auction, the seller gets four weeks of advertising prior to auction, on auction day when the property sells under the hammer contracts are exchanged and completion takes place only four weeks later. That’s a maximum time of eight weeks for a secure sale.

Also, as part of Mr Javid’s plans to clamp down on gazumping he is looking at encouraging sellers to put more data online to speed up the house-buying process and encourage buyers and sellers to pull together evidence so homes are ready for sale.

This is also addressed with a sale by auction as it cannot take place without a legal pack for the property. We ask all our vendors to instruct their solicitors to create this pack for potential buyers to review as part of their due diligence process prior to bidding.

A legal pack can often include water & drainage and local authority searches, special conditions, Land Registry documents and the Energy Performance Certificate (EPC) meaning buyers have full disclosure of the property they are purchasing. Of course we always recommend they view the property in person too – just in case!

However, even with all these safeguards we do appreciate that many buyers do not consider a sale by auction as their first option when looking to dispose of their property. It is still largely thought of as a last resort option but that’s simply not the case in recent years.

The sale of property by auction is becoming increasing popular – we have sold more than 1,110 lots so far this year and raised over £120m in sales – yet it only accounts for around 3% of the total property sales in the UK. I would hesitate a guess that that percentage will rise in coming years if Mr Javid’s plans come to fruition.

If you look at Australia for example – where gazumping also takes place – the percentage of auction sales is much higher at around 30%, a rise of around 10% on the previous two or three years, possibly again to avoid sales falling through…?

The eight-week call for evidence from across the property industry launched today will provide interesting reading and can be nothing but positive for seller and buyers alike. Whatever the outcome it should make the process of buying a property much more straightforward which is great news for all concerned.

Written by Andy Thompson

EAN Content

Content shared by this account is either news shared free by third parties or sponsored (paid for) content from third parties. Please be advised that links to third party websites are not endorsed by Estate Agent Networking - Please do your own research before committing to any third party business promoted on our website.

You May Also Enjoy

Breaking News


A roundup of the week’s top property and proptech news stories in partnership with Proptech-X   Table of ContentsHide nurtur.group continues to strengthen its leadership team PRESS RELEASE: BriefYourMarket partnerships take lead generation to next level MyIdentity selects Armalytix to create a proof-of-wealth solution for the property market Is Rishi Sunak to blame for the overheated…
Read More
can you live in a haunted house
Home and Living

Could you live in a Haunted House?

I’m sure that most of us, at one time or another, have had the feeling that we are not alone at home!  Maybe you are someone, like myself, that those little noises at night causes you to pull the bed covers over your head. You’ve spent the evening watching that ghostly horror movie, your senses…
Read More
Love or Hate Rightmove
Breaking News

Property prices double around Elizabeth Line stations

Rightmove’s new Elizabeth Line study reveals asking prices have more than doubled over the past decade in the local areas around Maryland, Abbey Wood and Stratford stations Despite delays in the line opening, the number of buyers looking to move near the stations has steadily surged: Buyer competition is now more than nine times that…
Read More
What will property prices do in 2022
Estate Agent TalkIndustry Interviews

Interview: Mark Hayward and his market forecasts

Residential Expert with Mark Hayward – May 2022 With last week’s relatively uneventful Queen’s speech in the rear-view mirror, now’s the time to assess the current state of the property market and predict what might be round the corner. We spoke to former chief executive of Propertymark and Just Move In ambassador, Mark Hayward, who…
Read More
Breaking News


Daily bite-sized proptech and property news in partnership with Proptech-X.   Will the Renters’ Reform Bill level up the rental sector? It is still unclear whether or not Michael Gove, the incumbent Secretary of State for Levelling Up, Housing and Communities (DLUHC) will be able to level up the lettings industry and strike a fair…
Read More
Software & Tech

iMind – a step to successful business online

The iMind platform helps entrepreneurs, large or small businesses and companies implement new projects. Employees and partners can be in offices in different countries, can join video conferences from home or vacation at the sea. Thanks to the high quality of iMind technologies, the communication between partners is always at a high level. One of…
Read More