With the property market heating up, we are seeing quite a few buyers pipped at the post. The G Word (Gazump) is popping up again, and people are not sure what just hit them.
What does Gazumped mean?
Being Gazumped occurs when you verbally agree to buy a property, and then the seller (vendor) talks to someone else behind your back and sells to them, usually at a higher price. The next thing you find out is the vendor has exchanged contracts with someone else and you have lost the property.
But what about all that emotional energy, time & hundreds of dollars spent on pest inspections reports, solicitor costs, building reports, and moving plans? For those who have experienced this in recent weeks, we are certain you will not let it happen again.
What can you do to beat gazumping?
Exchanging contracts is the only way to beat gazumping. Unfortunately, a sale ain’t a sale until contracts are exchanged. English property laws dating back to 1677 require a binding agreement to be an “exchange of contracts”. The only exception is an auction whereby the highest bidder is bound to purchase the property after the auction.
What Can I Do NOW to Prepare for a quick property purchase?
The best thing to do is build a team of professionals ready for the big moment. They have done this 1000’s of times versus your 2 or 3 transactions, so make sure you leverage from their experience.
Here is a list of people to have on speed dial in your mobile phone:
* Accountant – know which name you are going to buy the property in, or what structure.
* Mortgage Broker – obtain solid finance approvals (learn the difference between pre-approvals, conditional approvals and final approvals). Find out your borrowing capacity.
* Solicitor or conveyance – They will read the contract for you and advise you on legal dscisions. ask the agent to send the contract as soon as possible to your solicitor, and have them in advise you through the “exchange” process. Also, know when you can use a cooling off period to give you more time to get prepared.
* Pest Inspector and Building Inspector – Apart from having guys crawl over the property for cracks and critters, find other consultants to check anything else that is flagged in the contract i.e. flood zoning, bushfire zones, heritage consultant, RTA reports for future roads through your house, conservation areas, mining subsidence, powerlines. There are consultants in every field to help you check out your property.
If you need help finding these people, call Plan Assist on 02 9449 2333 and find out who we recommend. We have a full list of consultants in any field.
