We have just had our offer accepted on the house of our dreams in a popular part of Norwich. There was a bidding battle for the house. I am very worried that we are going to be ‘gazumped’ as houses like this so rarely come on the market. Does this still happen and, if so, what can we do to prevent it happening to us?
House prices are rising at present and in a rising market gazumping does happen from time to time. However it is rare in Norwich - unlike in London where the market is more aggressive. You should check that the house has been taken off the market. Also I suggest that you ask your solicitor to keep the estate agent informed of your progress towards exchange of contacts, so the seller and the estate agent know that you are keen to move swiftly to exchange and completion.
Would we know if someone else makes a higher offer for the house?
Estate agents are legally obliged to inform the seller all offers made for a property. Therefore if someone else does make a higher offer for the house, even though it is no longer on the market, the agent has to inform the seller. It is then up to the seller whether he decides to proceed with you or wishes to accept the higher offer.
It would be awful if this happened to us. We are about to spend a lot of money on the house, including the cost of the mortgage application and valuation and the sum we have to pay to our solicitor for search fees. If we were gazumped, would we be compensated?
There is nothing you can do, I am afraid, if this happens to you. You should ask your solicitor to do everything possible to proceed to exchange of contracts as swiftly as possible. Once you have exchanged, you cannot then be gazumped. If ever a buyer is gazumped, a seller who has accepted a higher offer from someone else may wish to contribute towards the wasted costs of the original buyer, as a goodwill gesture.