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What is Gazumping and is it Legal?

Written by Reviewed by Emma Lunn

22nd Nov 2019 (Last updated on 2nd Jul 2020) 6 minute read

Gazumping is when a seller accepts an offer from one buyer, and then accepts an offer from another buyer. The second buyer has then 'gazumped' the first buyer. Though considered unfair, it is legal to do in England and Wales. The law is different in Scotland.  

Gazumping can happen any time before you exchanging contracts. It can be very disappointing and often seems unfair.

Being gazumped means that even after comparing conveyancers and starting the buying process, you could still be outbid. Compare My Move has created this guide to help you understand the meaning of gazumping and how to avoid it, making your conveyancing process that much easier.

This article will cover the following:
  1. What is Gazumping?
  2. Is Gazumping Illegal?
  3. Gazumping in Scotland
  4. How to Avoid Being Gazumped
  5. What to Do if You’re Gazumped
  6. Saving Time and Money With Compare My Move

What is Gazumping?

Gazumping is when a seller accepts an offer from one buyer, and then accepts an offer from another buyer and proceeds with that transaction instead.

You can be gazumped up until the exchange of contracts.

Some sellers will initiate a “contracts race” between the original buyer and the gazumper – whoever is in position to exchange contracts first “wins” the property.

What is Gazundering?

Gazumping is not to be confused with gazundering. 

Gazundering is when the buyer and seller agree a price but the buyer then lowers their offer before contracts are exchanged. The seller then has to decide whether to sell the property at the lower price, or market it again in the hope of finding a buyer who will pay the original price.

Gazundering can occur any time before exchanging contracts as the transaction is not yet legally binding. 

Why Does Gazumping Happen?

A buyer might be gazumped if:

  • The seller accepts a higher offer on the property.
  • The seller thinks the buyer is taking too long to be ready to exchange contracts (i.e. because they have not yet sold their existing home)
  • The rival buyer can exchange contracts more quickly

It can be disappointing being pushed out of a sale you thought you’d been accepted for. This is especially so if you’ve already paid for the survey and conveyancing fees and have arranged a mortgage. For reasons like these, gazumping is universally frowned upon but it is not illegal in England and Wales.

Is Gazumping Illegal?

Gazumping is not illegal in England and Wales. 

Despite making an offer and having it accepted, the agreement between you and the seller does not become legally binding until the contracts have been exchanged. Until then, the property is listed as ‘Sold STC’ which means, even though the offer has been accepted, the sale is still 'subject to contract'. As the transaction is not yet complete or legally binding, another buyer is not breaking the law by providing the seller with an alternative offer.

However, gazumping is often considered unfair and immoral as the original buyer will have paid for surveys and conveyancing, and be emotionally committed to the purchase.

Some property experts are calling for the introduction of “home reservation agreements” in a bid to stop gazumping. 

This scheme would mean both the buyer and seller paying an additional fee once the sale has been agreed. If either party then withdraws from the sale, they will lose their money. Experts say this would reduce gazumping and the number of sales falling through.

Buyers purchasing a new build home already have to sign a home reservation agreement and pay a reservation fee in order to proceed with their purchase.

Gazumping in Scotland

The law is different in Scotland. 

To prevent buyers from being gazumped, an accepted offer is considered as legally binding. 

The only time gazumping is possible in Scotland is if a property survey reveals problems with the property that would be expensive to put right. This then provides the buyer with a way to renegotiate, possibly reducing the asking price. This is when the seller may be tempted by a higher offer. However, it's still rare for gazumping to occur. 

How to Avoid Being Gazumped

The latest data from Market Financial Solutions revealed that 31% of British homeowners in the past decade have lost out on a property deal because of gazumping. 

Out of the people who lost out on a property, 39% still had to pay fees despite not completing the transaction. The data also revealed that 80% of people are in favour of legally banning gazumping.   

The data above proves that gazumping is an issue you need to be aware of. There are a several things buyers can do to avoid being gazumped.  

Compare My Move has created a helpful list to aid you in the process of buying a house and prevent yourself from being gazumped. It’s never 100% preventable but there are a few tips and tricks to consider:

1. Be prepared and be organised

Before making an offer, ensure that all your paperwork is gathered and that you’ve worked out your budget. It’s important to reduce the chance of any delays, so being as organised as possible. Find a conveyancing solicitor, sort out a mortgage, have the necessary documents at hand and sort out your finances. The seller will be much more willing to continue if the process moves along quickly. 

2. Get a mortgage in principle

A mortgage in principle is a conditional offer made by a mortgage lender stating that it will ‘in principle’ give you a loan up to a certain amount. Having this completed early will speed up the process and position you as an organised and appealing buyer.

3. Work quickly

Try to reduce the number of delays by moving the process along quickly. The quicker you hire a solicitor and surveyor the better. Compare My Move has the perfect tools to allow you to compare quotes and find a professional, verified conveyancer, saving you both time and money.

4. Ask for the property to be taken off the market

If you ask the seller to take the property off the market, it will reduce the exposure the property has and limit the number of potential buyers who might make a counteroffer.  

5. Build a relationship with the seller

The better the relationship you have with the seller, the more likely they are to favour you as a buyer. Keep them informed with what you’re doing and how close you are to being ready to exchange contracts.

6. Get insured

Home buyer protection insurance is a good way to protect yourself against gazumping. If the sale falls through because the seller accepts another offer, you can claim back some of the costs you’ve already spent: e.g. conveyancing fees, survey fees etc. It provides extra peace of mind and protects you financially.

What to Do if You’re Gazumped

If you are gazumped, you could try to:

  1. Make another, higher, offer to gazump the gazumper. However, you’ll need to be sure you can afford the extra cost. If you’re financially able to then it could be worth a try.
  2. Explain to the seller why you are the better buyer. For example, you might be chain-free, a cash buyer, a first-time buyer or flexible about the completion date. Mention anything that will make you seem more appealing to the seller, but remember to not be deceiving.

You can never be fully protected against gazumping, so it’s better to be prepared. However, if you’ve been gazumped after exchanging contracts, then you should speak to your conveyancing solicitor for advice. Even though it’s rare, it can still happen and you would then have a legal case against the seller due to the breach of contract.

Saving Time and Money With Compare My Move

We hope this guide has helped you understand the meaning of gazumping and how to avoid it happening to you. If you’ve had your offer accepted then it would be wise to find a professional conveyancer as soon as possible to reduce the risk of being gazumped. Simply fill out our quick and easy form to instantly get connected with up to 4 licensed conveyancing solicitors near you.

Zenyx Griffiths

Before Compare My Move, Zenyx once wrote lifestyle and entertainment articles for the online magazine, Society19 as well as news articles for Ffotogallery.

Emma Lunn

Reviewed by Emma Lunn

Freelance Personal Finance Journalist,

Emma Lunn is an award-winning journalist who specialises in personal finance, consumer issues and property.