What is Gazumping?
Gazumping in Australia refers to a situation in which a seller of a property accepts an offer from a potential buyer, but later decides to accept a higher offer from another buyer. Essentially, gazumping occurs when a seller reneges on an agreement with a buyer in favor of a more lucrative deal.
To prevent gazumping from happening to you in Australia, you can take the following steps:
- Be prepared: Ensure that you have all your finances and paperwork in order before you start making offers on properties. This means having pre-approval for a mortgage, conducting building inspections, and doing your due diligence on the property.
- Act fast: When you find a property that you like, move quickly and make an offer as soon as possible. This may mean submitting a written offer or signing a contract immediately.
- Consider a cooling-off period: Some states in Australia have cooling-off periods where you can change your mind and withdraw from the contract within a specified period (usually 3-5 business days) after signing. This can give you some time to think and assess whether you really want to proceed with the purchase.
- Get everything in writing: Ensure that all agreements and understandings between you and the seller are put in writing and signed. This can include any special conditions, such as the inclusion of fixtures and fittings or the settlement date.
- Consider making a higher offer: While this is not always practical or affordable, making a higher offer than the asking price can increase the chances of your offer being accepted and reduce the likelihood of being gazumped. However, be mindful of your budget and do not overextend yourself financially.
