Does property Gazumping happen in Scotland?
Gazumping. A word that sends shivers down the spine of many buyers trying to secure their dream home. Gazumping is associated with the English sale process but in Scotland it is legal too.
Just how common is Gazumping in Scotland? I will outline the risks and what you can do if you are gazumped!
You have viewed and offered for your dream home here in beautiful Scotland. You have negotiated an offer, which both parties are happy with, and matters are now with your solicitor to start the conveyancing work and to draw up legal contracts. Although both you and the seller are not legally bound at this point, it’s still very exciting and you feel it’s in the bag. Gazumping, especially in Scotland, has not even crossed your mind.
Suddenly a phone call or email changes everything! What now.
What is Gazumping?
Gazumping is when a seller & buyer have agreed a price for a property and the solicitors are in the process of drawing up contracts. Then the seller agrees to sell the property to another buyer, likely for a higher price or for better conditions i.e. quicker entry date.
It is a devastating development for any buyer and news you never want to hear. But you do need to have your wits about you as a buyer, and understand that it can happen. Until contracts (missives) are in place both a seller & buyer can change their mind.
Can Gazumping really happen in Scotland?
It’s not illegal in Scotland unfortunately. In Scottish Law, the sale is not legally binding until contracts (missives) are in place between the seller & buyer. Prior to contracts the seller is open to consider any offer.
But I have positive news! Gazumping rarely happens in the Scottish selling & buying property process. The only time we do sometimes see it happen is when it is a ‘sellers market’ and there is a shortage of property for buyers.
People within the property industry in Scotland, mostly solicitors & estate agents, do not tolerate or allow gazumping. This ensures it is a very rare event. The Law Society of Scotland and the RICS both strongly advise against gazumping and property professionals in Scotland follow these guidelines.
In my experience gazumping is highly frowned upon and the potential to gazump rarely presents itself. In fact, it is so frowned upon that if a seller tells their solicitor they would like to withdraw from the current offer and accept another, the solicitor will often resign from acting for them and the seller has to source a new solicitor. This means more cost to the seller and helps remove some of the appeal.
How property agents can help avoid it
As an estate agent myself I do struggle to see how gazumping could occur regularly in Scotland.
When we are selling a property for a client and we receive an offer, it starts a process for us. We start to work through all previous viewers, all noted interests and all other potential buyers. We start to understand whether we have any other buyers wanting a chance to offer or not.
This allows us to build a picture and either welcome offers from other parties, set a closing date or if we are confident we just have the one party wanting to offer, then we start negotiating with them one-to-one.
We leave no stone unturned, to ensure the seller has comfort that we have exhausted every possible buyer to achieve the best offer for them. So really, there should be no ugly surprises of a new offer coming in further down the line.
When an offer is verbally accepted viewings stop in Scotland (on most occasions). Meaning no new buyers should be submitting offers.
If agents are following this procedure then they should prevent any gazumping.
Ways to try and avoid being gazumped in Scotland
There are ways to try and avoid being gazumped. Try and keep a tight ship throughout the process. Here are some recommendations:
- Do not be blasé. Once your offer is accepted do not take your eye off the ball. Keep in touch with your solicitor, they are very busy people with lots of clients, so keep pushing matters along and requesting updates. No news is not always good news, so keep communication with your solicitor and mortgage broker open and regular.
- Make sure the property is marked under offer and viewings stop when your offer is accepted. This greatly reduces the chance of being gazumped.
- Try and have a good relationship with your seller. This does not have to mean inviting them for coffee, or sending them flowers to thank them, or even speaking to them regularly. But a positive rapport with the seller has huge value in Scotland. We like to stick to our word, so ensuring you have a positive rapport means they will be unlikely to walk away from you.
- Have a good, proactive solicitor & mortgage advisor. If your solicitor is taking too long, or your mortgage broker/lender are dragging their heels then this can cause frustration for the seller, increasing the chances of gazumping. Having a proactive solicitor and mortgage advisor are a huge asset and one of the most important tools you have.
In my experience communication is EVERYTHING throughout the legal process. I have seen many sales fall apart simply because people aren’t communicating correctly and frustration sets in.
If you have been gazumped in Scotland what can you do?
Gazump the Gazumper they say – in a nutshell submit a counter offer in the hope the seller will remain with you.
Not everyone has the financial ability to do this though, and more often buyers will be so annoyed & upset that they have been gazumped, that they will simply walk away. Which you can completely understand.
If you are trying to navigate your way through the differences of the English & Scottish property process then you may find these blogs helpful:
Moving from England to Scotland. The house buying process.