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Avoid Being Gazumped |
The Sydney property market is currently very strong. You will need to be prepared, when entering the market, to make an offer and exchange contracts as soon as possible to avoid being gazumped. |
Gazumping is the practice of accepting a higher offer after a verbal agreement has been made. Whilst frustrating to the prospective purchaser, gazumping is not illegal. Gazumping is prevalent when vendors receive numerous offers or when a property is strongly contested by prospective purchasers. |
When negotiating the purchase of a property by private treaty you cannot be sure that you have secured the property until contracts have been exchanged. The person selling will always accept the highest possible price and you should assume they will not stop short of gazumping to obtain this. |
To avoid being gazumped, make some careful preparations prior to looking for a property. Some hints are:
- Have a clear idea of the type, size and style of property which will suit your needs.
- Have your finance approved in principle so that you only look for properties within your budget.
- Advise your solicitor that you are in the market for a property and that a quick exchange will be required.
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| Note: contracts can be exchanged with a five day cooling off period to allow you to finalise any outstanding issues like finance approval or building and pest inspections. |
Some anti-gazumping measures are also in place. These include provisions in the Conveyancing Act for Contracts to be drawn up before a property is listed for sale. This enables prospective buyers to obtain a copy of the Contract and make initial enquiries and searches. If you would like assistance in drafting your Contract for sale, please contact Mark Nicholson. |
