What is Gazumping?
Gazumping occurs when a seller pulls out of a sale at the verylat moment and accepts a higher offer from a different buyer.This leaves the initial buyer with loss of upfront costs such as mortgage fees, conveyancing fees and a property survey cost.
Note; Gazumping insurance and Home buyer protection insurance are the same thing.
What is Gazumping insurance or Home buyers Protection Insurance?
Gazumping insurance essentially covers you in the event the seller pulls out of a sale. You will be able to get a payout to recover some or all of the upfront costs of buying the home. Gazumping insurance is usually purchased once an offer has been accepted on a property but at the very latest within 2 weeks of conveyancing work starting on the property.Cover can last up to 6 months from most providers. Gazumping insurance costs up to £70 in most cases and is paid upfront not in installments.
Gazumping or home buyers protection insurance will cover you as long as you reside in the Uk and the property you are buying is within the UK.
Gazumping insurance will not pay out for retrospective costs hence costs incurred before the insurance was purchased.Gazumping or home buyers protection insurance will also not pay out for situations caused by you e.g you decide you no longer want the property.
What does Gazumping insurance or home buyers protection insurance cover you from?
Gazumping insurance essentially covers you from a few scenarios but this are all dependant on the insurance provider.
The main scenarios include
Discovery of negative factors in the conveyancing process or property survey
When a seller accepts a higher offer and leaves you with unrecoverable costs
Seller pulling out of the transaction for a variety of reasons such as a chain transaction failing. E.g the seller couldn't move into their new home because the seller couldn't get a mortgage to buy a new home.
Mortgage lender insisting on ratification work or Mortgage lender valuation is lower than the property offer the seller accepted.
Do you really need Gazumping insurance?
Well that's really up to you but with thousands of pounds on the line a £70 Gazumping insurance might represent great value.