Article up to date as at 19 June 2019.
However, you later receive a call from the real estate agent who says that the owner has accepted a higher offer from another buyer.
You have been gazumped, which is when you have an agreement with an agent or seller to buy a property at particular price. But before the contracts are exchanged, the vendor decides to sell the property to a buyer who has offered a higher price.
Gazumping is not an illegal practice and the agent is legally obligated to pass on any additional offers on a property to the vendor up until the exchange of contracts. Similarly, sellers are allowed to change their minds and accept an offer from another purchaser.
For a buyer, it is distressing and upsetting to miss out on a dream home and have to start the process from scratch.
However, there are several ways buyers can protect themselves from gazumping.
Have your finances ready
In the property buying process, having your finances ready will hold you in good stead. Make sure you’ve seen your mortgage broker to obtain a loan pre-approval and that you have funds available for a 10% deposit.