Gazumping: What it is and how to deal with it

Gazumping is when a seller accepts an offer on their property and then accepts a higher offer from a different buyer.

Gazumping is a home buyer’s worst nightmare.

Although it’s not common, it’s still worth knowing what it is and what you can do to reduce the odds of it happening to you.

Why is gazumping bad?

Gazumping can leave the victim both financially and emotionally drained.

At this point, they have probably spent money on conveyancing fees and paid a lawyer to start the paperwork. So when they lose the home, all that money has simply gone down the drain.

Gazumping is also bad for estate agents. In the short term, they benefit since their fee rises with the higher price, but the gazumped buyer is less likely to use their services again, and it may damage their reputation.

There’s a fairly widespread belief that gazumping is illegal in Britain, partly because the government considered outlawing it back in 2001.

As unfair as it might feel when you’re on the receiving end, gazumping is a perfectly legal aspect of the property-buying process in England and Wales, up until the point of exchange.

Before this, no contract exists between the buyer and seller, which means either is free to change their mind about the transaction, without penalty.

As this exchange of contracts between your conveyancer and the seller’s solicitor comes relatively late in the process – after you have arranged for a property survey, your conveyancer has conducted the necessary searches and you have received your mortgage offer – there’s typically a delay of at least several weeks between the seller accepting your offer and that agreement becoming legally binding.

Within this period, the seller may accept an offer from another buyer in preference to yours. This is usually because the other buyer has offered a higher purchase price. The estate agent is obliged to pass on all offers, and of course will prefer higher offers (with higher commissions).

You can also be gazumped if the seller decides to reject your offer in favour of another buyer’s for any reason – it doesn’t have to be for an offer of more money.

For instance, if you are experiencing delays with the conveyancer or your mortgage application, the seller may decide to accept an alternative offer from a buyer who already has a mortgage offer in place in order to facilitate a quicker sale.

When are you safe from gazumping?

When an exchange of contracts has taken place, a binding contract exists and neither party can withdraw without incurring liability for breach of contract.

How to reduce the risk of gazumping

You can go some way to protecting yourself from gazumping before an exchange of contracts:

  • Ask the seller to take the property off the market as soon as your offer has been accepted.
  • Get an agreement in writing stating that the seller cannot consider any other offers for a specified period of time.
  • Exchange at the earliest opportunity.
  • Pay a pre-contract deposit with the seller, which will be lost to the other party if either withdraws from the sale.
  • Get a mortgage approved in principle, which signals to the seller that you’re ready to get the paperwork moving as soon as your offer is accepted.
We show offers we can track - that's not every product on the market...yet. Unless we've said otherwise, products are in no particular order. The terms "best", "top", "cheap" (and variations of these) aren't ratings, though we always explain what's great about a product when we highlight it. This is subject to our terms of use. When you make major financial decisions, consider getting independent financial advice. Always consider your own circumstances when you compare products so you get what's right for you.

More guides on Finder

  • Finder Lending Innovation Awards 2022

    These awards recognise innovation in the areas of credit cards, loans, mortgages and BNPL. We reveal this year’s winners.

  • Lending Innovation Awards 2021

    These awards recognise innovation in the areas of credit cards, loans, mortgages and BNPL. We reveal this year’s winners.

  • Agricultural mortgage

    What you need to know about getting a mortgage if you’re buying or refinancing a farm or farmland, including the factors lenders consider when you apply for one.

  • Mortgage for a pub

    Everything you need to know about taking out a mortgage to buy or refinance a pub. Find out where to get one, how to get the best deal and the factors lenders consider.

  • Mortgage for a hotel

    In-depth guide to taking out a commercial mortgage to buy or refinance a hotel. Find out how to get the best rates, factors lenders consider and what you need to apply.

  • Bridging loan vs commercial mortgage

    Find out if a bridging loan or commercial mortgage would suit you if you’re buying or refinancing commercial property and when a bridging loan can be a better option.

  • How much deposit do I need for a commercial mortgage?

    Find out how much deposit you need if you’re taking out a commercial mortgage, including the factors lenders take into account, and how to get the best deal for you.

  • Getting a 5% deposit mortgage under the government’s new guarantee scheme

    Learn more about the new government scheme that allows first-time buyers and home movers to get on the property ladder.

  • Chain break finance

    Learn everything you need to know about chain break finance – a type of bridging loan that stops you losing your dream home if the sale of your existing one falls through.

  • Fix and flip

    Read our in-depth guide to fix and flip and how this type of property investment works, including the factors you need to consider, the risks to be aware of and how to finance it.

Ask an Expert

You are about to post a question on finder.com:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder.com provides guides and information on a range of products and services. Because our content is not financial advice, we suggest talking with a professional before you make any decision.

By submitting your comment or question, you agree to our Privacy and Cookies Policy and Terms of Use.

Questions and responses on finder.com are not provided, paid for or otherwise endorsed by any bank or brand. These banks and brands are not responsible for ensuring that comments are answered or accurate.
Go to site