Minimising Gazumping Risks

What is Gazumping?

Imagine making an offer to an agent or vendor, having it accepted verbally, but discovering later that the seller sold the property to someone else, usually at a higher price point. This is known as “Gazumping”.

When your eyes are fixed on a property, you last want someone else to buy it. Technically, this is legal as long as a contract still needs to be established.   Only when a contract is established is a property considered sold.

Gazumping can be significantly troublesome and heartbreaking if you have invested time, money, and emotional energy into securing that property.

Is Gazumping legal in NSW?

Many consider Gazumping unethical because it disregards the initial agreement and undermines the integrity of the transaction. It can also contribute to instability in the real estate market. Buyers may hesitate to invest in properties out of fear. This inefficiency and reduced liquidity can hurt the overall market dynamics.

While sellers can argue that they have the right to accept the highest offer, many buyers believe there should be more accountability and transparency to prevent gazumping.

Now, how do you minimise gazumping risks?

First, the obvious: make your offer irresistible.

Presenting a compelling offer can make the seller more inclined to accept it without entertaining competing offers. Consider adding extra incentives. This could be a shorter settlement period or covering specific fees to sweeten the deal.  By showing your commitment, you are establishing a solid negotiation foundation.

Build a good relationship with the seller and their agent.

Establish a rapport with the seller and maintain open communication with their agent.  By fostering trust, you make it less likely for the seller to entertain competing offers. Take the time to understand the seller’s motivations, preferences, and concerns. This way, you can tailor your offer to align with their needs.

A collaborative relationship with the agent works in your favour. They can keep you updated about the transaction status, and you can strategically position yourself to outshine other potential buyers.

Act as swiftly as possible.

Time is of the essence. The market changes, and so might the seller’s mind. Act fast on the purchasing process. This signals to the seller that you are serious and ready to proceed with the transaction. This will instil confidence in the seller, potentially deterring them from entertaining other offers.

Contact Waratah eConveyancing to secure your dream property.

By implementing proactive strategies and seeking professional assistance, you can minimise the risk of gazumping and increase your chances of successfully securing your dream property.

Bev Gunn of Waratah eConveyancing offers professional and legal advice to help you navigate the legal aspects of the transaction. She can guide you in protecting your interests and ensuring a smooth and faster closing. To make an appointment, call Bev at (02) 4209 2016.