Have You Been Gazumped and Learn How to Avoid It

Being gazumped is probably the biggest bane of purchasing a property; it doesn’t matter if it’s a new house for yourself, a commercial property or even a residential investment property. It can also be a massive problem for property investors especially, as they are inclined to offer below market value for a potential property. Meaning someone could come in after them and put in a slightly higher offer, leading to them being gazumped.

The phenomenon of gazumping frequently leads to a massive loss of income, particularly because so much time has been invested on the properties in question. At the end of the day, you may be able to make back any possible profit on these deals that could have been lost, but the time lost, especially as you could have been using it on another deal, will never be retrievable.

The only way to avoid being gazumped is by getting the vendor to accept a “lockout” or “exclusivity” agreement. This type of contract specifies that the vendor will not accept an offer or sell to, anyone else during a certain specified time period. The agreement could be tailored to prevent the vendor from being able to even offer a viewing of the property without you giving your consent.

All decent solicitors will be able to draw up an exclusivity contract that is effective for you. It could cost a fair bit of money but it is well worth it in the end. And if you want to be sneaky about it, once contacts have been drawn up, you could then conceivably use this as a template for any future deals you may have.

Sellers, who may be having problems getting rid of their property for sale in Norwich or indeed needing to sell quickly, should not have any problems entering this type of agreement. They will be conscious of the fact that you’re a professional and are only protecting your prospective investment. Nonetheless, you may have to give a deposit as a gesture of good will; this would normally be about two percent of the property’s value.

Sometimes it may seem pointless on having this type of agreement in place for all of your prospective purchases, because if some prospective sellers have been having difficulties selling their property’s for six months, for example, and no one has viewed it for four of those months, it’s hardly likely that a person will come in and gazump you in a couple of weeks time. You won’t need this agreement on every deal, that’s for sure, but it may be an option to use on a really big deal that is potentially going to make you loads of money.