Irrespective of how silly the word may sound, gazumping is a major dilemma in the real estate industry. Gazumping refers to a situation where a prospective buyer makes an offer on a particular property wherefore the seller gives verbal approval but withdraws from the deal as soon as he gets a better offer. This normally happens because up until an actual exchange of written contracts, real estate deals are said to be volatile. Before any legally binding agreement is signed, the seller is said to be free to entertain other offers even after he accepts one particular offer. This is one of the sleaziest ploys of the real estate industry.
Gazumping is an extremely unpleasant and deeply disconcerting ordeal. Every buyer is vulnerable to the possibility of facing gazumping until there is a legally binding exchange of contracts. A real estate professional is entrusted with securing the best possible price for the property he is looking to sell. Therefore, even if they are approached with a decent offer on their property and they accept it at that time, they are free to entertain other prospective buyers who offer more attractive prices.
When it comes to real estate transactions, gazumping is not an unfamiliar concept. It has been used as a tactic for a long time in the buying and selling of properties.
In most states of Australia, a verbal contract is not considered legally enforceable until there is a signed exchange of legal documents. As a buyer entering the Australian real estate industry, you are exposed to the plausibility of becoming a victim of gazumping.
It should be noted that if a buyer experiences gazumping regarding a particular property, the seller and the real estate agent of that property face no liability in the matter. They are not legally bound to pay any compensation to the victim of gazumping. So even if you are gazumped as a buyer, the other party remains free of any liabilities.
There are many ways using which a buyer can eliminate the risk of being gazumped by sellers and vendors. Reducing the time gap between making an offer and drawing up a legal contract is the most important one. Reviewing your finances and making sure that you are capable of making an exchange of contracts as soon as you make an offer is a safe way to go. You can also choose to hire a buyer agent who is sure to safeguard your best interests at every step of the way.
