Gazumping: What is it, and is it legal?

When you step inside a property and immediately start thinking about moving in, you know you've found your next home.

But if another buyer beats you to it and the seller accepts their offer, you can end up missing out on the property you had high hopes for.

We advise buyers to keep their options open, as there are always more stunning properties for sale. However, an increasing number of buyers are using a strategy called gazumping to try and secure a property even after the sale process has already started with another buyer.

What is gazumping?

The term gazumping can be dated back as far as the 1920s from a Yiddish word that meant overcharging.

In the modern day, gazumping simply means to offer a seller a larger sum for a property than what they've already accepted from someone else.

In essence, it's a way to try and secure a property after an offer from a different buyer has already been accepted. By offering more, the buyer tempts the seller into abandoning the sale to accept the higher offer instead.

Gazumping has been a trend for decades, but just this year it's been estimated that 37% of homebuyers in the UK are getting gazumped.

Is gazumping legal?

Gazumping is legal if the seller hasn't signed a contract yet. Until then, the seller is not legally bound to commit to the sale and can still explore offers from other buyers.

The only situation where gazumping would be considered illegal is when a seller abandons a legally binding contract to accept your offer instead, which they would be strongly advised against due to the legal implications.

Although not illegal, there are financial repercussions to gazumping for the buyer and the seller.

The surveyors and solicitors will still expect payment for their time, meaning that the buyer still has costs to cover even though the sale wasn't completed.

With our conveyancing for buyers, we have a 'No Move No Legal Fee' guarantee.

That means if you get gazumped and the sale falls through, you won't have to pay up for the legal costs of the incomplete sale. That's why being with a professional estate agent like Reeds Rains can make all the difference.

How can I stop people from gazumping me?

It would be unfortunate if you agreed to buy a property just to have the deal revoked before contracts are exchanged as the seller has been offered a higher price, but it's an outcome that is happening more regularly.

It's not possible to completely prevent the risk of gazumping, but there are actions you can take to reduce the likelihood.

1. Ask the seller to take the property off the market.

To show you are a serious homebuyer, ask the seller to remove the property from the market. Not only will this make you seem more committed to the purchase, but it also reduces the chances of the property being seen by potential gazumpers.

2. Get a Mortgage in Principle now.

It's important you can get to the exchange of contracts quickly to avoid being gazumped. Often the time taken to finish a mortgage application can slow down the process, and allow gazumpers to swoop in last minute.

You can get a Mortgage in Principle in just 15 minutes with our trusted partner Embrace Financial Services. They search rates from over 70 lenders to ensure you've truly explored your options. Simply book an appointment now.

3. Buy via the modern method of auction.

Buying a property via the modern method of auction is a different way of securing a new home.

As the property is being sold at auction, the process of making offers is much different. It means when bidding closes, if your offer wins, the seller is unlikely to receive any further offers.

Ultimately the best practice for home buying is to be quick and confident. If you hesitate you could miss out on a property, and gazumping is not a guaranteed method of securing a property.

If you have any questions about gazumping, or the buying and selling process as a whole, contact your nearest branch and your local property experts will be happy to talk you through your queries.

Are you planning on moving? Book a free no-obligation property valuation to get started.

Your home may be repossessed if you do not keep up repayments on your mortgage