Gazumping refers to the practice of a seller accepting a higher offer for a property after a previous offer has been accepted. This can happen when a seller receives a higher offer from another buyer while the original offer is still being processed.
Gazumping can be frustrating and disappointing for the original buyer, as they may have spent time and money preparing to buy the property, only to have the deal fall through at the last minute.
Gazumping is more common in countries where there are no legal safeguards in place to protect buyers from this type of behavior. In some countries, such as the Scotland, gazumping is less common because there are legal protections in place that allow a buyer to take legal action against a seller who accepts a higher offer after the original offer has been accepted. However, in England you can be ‘gazumped’ right up to exchange.
My experience of Gazumping
I once lost a house that I offered £132,000 on and someone came in a month or two later and went up to £135,000. Unfortunately I wasn’t in a position to find an extra £3k at the time and I was at the max on my mortgage lending and so I lost the property. However, I hadn’t yet forked out on searches and so it was onto the next property. Thankfully, my mortgage was transferable.
Does Gazumping always get you house?
Gazumping does not always result in the buyer who made the higher offer getting the house. While a seller may accept a higher offer, this does not necessarily mean that the deal will go through. The original buyer may still have the opportunity to negotiate with the seller or try to match the higher offer.
In some cases, the original buyer may even be able to take legal action against the seller if they feel that the seller acted in bad faith or violated the terms of the original agreement, but this depends on what country you are buying in.
Get contracts drawn up ASAP to avoid Gazumping
It’s important to note that gazumping is generally considered unethical and can be very frustrating for buyers. As a result, it’s important for buyers to be aware of the potential for gazumping and to take steps to protect themselves, such as entering into a legally binding agreement with the seller as soon as possible.