For many home buyers, it’s an upsetting scenario.

At the last minute, a seller rejects your offer because they’ve accepted a higher bid. Your costly and stressful search is back at square one.

You've been gazumped... Can they do that?

What is gazumping?

Gazumping is when a seller breaks a verbal agreement on a sale because they’ve accepted a higher offer.

It’s possible because verbal agreements, unlike written contracts, are not legally binding. Once written contracts are exchanged, neither party can back out without incurring penalties. But written contracts aren’t typically signed until after buyers go through legal steps, surveys, and land checks.

That process can take months and cost hundreds of pounds. And buyers who are gazumped lose all fees they’ve spent so far. Gazundering on the other hand is when the buyer changes their offer to a lower bid before exchange of contracts.

Is gazumping legal?

Yes, gazumping is legal in England and Wales, frustrating as it may be for buyers. (Scotland, however, has a slightly different law.) But buyers can take steps to reduce the chances they’ll be gazumped and make plans for how to respond if it happens to them.

Why is gazumping legal?

Gazumping is legal because a property is only deemed as "sold" when the contract of sale has been exchanged. Until the contract has been exchanged, both parties can legally pull out of the sale.

Can you gazump in Scotland?

Yes you can gazump in Scotland before the missives have been concluded. However once an offer has been accepted by the solicitor they can no longer accept further offers from other parties. In order to accept the offer the seller would need to end the contract with the solicitor and start with another solicitor.

Do estate agents allow gazumping?

As gazumping is legal, estate agents allow gazumping to occur. They’re legally obligated to pass on any offers to the seller. When this offer is higher than the original it will end up looking like the seller has been gazumped.

However this does not mean they encourage it. Speak to your estate agent to see what their policy on gazumping is.

Do estate agents encourage gazumping?

No, most estate agents don’t encourage gazumping - but they’re legally obligated to present all offers in writing to sellers. As a result, it’s down to the seller to decide how to move forward. Still, buyers should ask agents their position on gazumping so they’re aware of its likelihood and check on the estate agent's gazumping policy.

How common is gazumping?

Gazumping is fairly common in the UK but varies by region and market conditions. Around 11% of property sales were gazumped in 2021. A 2018 survey by Emoov.co.uk found that one-quarter of buyers in Britain and Northern Ireland reported being gazumped in the previous two years.

Gazumping was most common in London (66%), followed by the North East (22%), the Midlands (21%) and the North West (21%). The good news is that across the UK reports of gazumping dropped 11% from the previous year. The bad news? For Londoners, the level of gazumping jumped 31% from 2017.

Other surveys show different figures but the essential point is that the property market, particularly in England generally and London specifically, is competitive.

Unbound by legal restrictions on gazumping, many sellers feel comfortable abandoning verbal agreements for higher offers. Gazumping may feel unethical to buyers, but it’s fully within sellers’ rights.

What can you do if you’ve been gazumped?

If you've been gazumped you can try to up your offer.

Typically, you have the opportunity to match or exceed any new - and likely higher - offer. That could trigger a bidding war between you and a new buyer, which isn’t a particularly good scenario for anyone but the buyer. Or you could simply withdraw and restart your search.

How can you prevent being gazumped?

It’s tough to completely avoid the possibility of being gazumped. But as a buyer, you can take the following steps to minimise the risk and prevent being gazumped...

1 - Be prepared

Ensure your finances are in order when you begin your property search. Know how much you can afford to pay and have the documents to prove it. Make a full accounting of all your cash on hand, income, and debts.

It’s also a good idea to have your solicitor in place and a mortgage agreement in principle in hand before you even get to the offer stage. A mortgage in principle is a written estimate from a lender of how much you may be able to borrow.

You could also consider home buyers protection insurance. A basic policy can help you claim back some costs in case you’re gazumped.

Policies differ, but most cover sums well into the hundreds of pounds for between 120-180 days. Most policies cost around £50 for a one-off premium.

Buyers should always consult independent financial advisors before beginning their search.

Ready to appoint a conveyancer? Find tips on how to pick the right legal representative for your move, here.

2 - Sell your property before buying another

Doing so offers certain advantages. For instance, it means you’re less likely to be stuck in a financial chain, waiting for your old home to sell before being able to pay for your new property. That’ll give you plenty of cash at hand when you make your bid.

It also ensures you won’t get stuck paying two mortgages at the same time if you’re unable to sell quickly after agreeing on a new property. Consider renting while you’re searching for a new home.

3 - Move quickly

Only make a realistic offer when you’re confident you’re in a strong buying position and then try to lock in the sale quickly. Research local property prices so that your offer is both in line with your ability to pay and within area expectations.

For instance, if you offer far below asking price, the seller may feel justified continuing to search for a buyer willing to pay more. Sometimes, gazumping occurs simply because a seller grows impatient at the pace of a sale. They may drop one offer in favour of another because the latter can act more quickly.

4 - Ask the seller to take the property off the market

Many buyers forget to ask the seller to do this after acceptance of their offer. If a seller continues to host viewings and get higher bids, it may prove difficult to resist dropping you for a better offer. It won’t matter how much you’ve already spent in upfront costs. Sellers aren’t obligated to remove the property from listings, but it’s worth asking.

Alternatively, you could request an exclusivity agreement.

An exclusivity agreement is where the seller agrees to not seek or accept offers from other buyers for a specific period of time. This could give you ample time to get your affairs in order, like sorting out last minute mortgage prep, or ordering surveys of the property.

5 - Develop a friendship with your seller

All these steps can be made easier if you cultivate a trusting relationship with your seller. Some estate agents and solicitors are wary of having clients in direct contact with each other. But you should still show a genuine interest in the property so the seller knows you’re serious about the investment.

Sellers who feel a connection with their buyers may be less likely to gazump them out of a sense of fairness.

Once you’ve established a good foundation, maintain open communication. Let your seller know what steps you’re taking to speed things along. Staying engaged will help ease any concerns about your seriousness and will also help you respond proactively to any issues the seller may have.

6 - Keep the sale moving

Exchange contracts, return all other paperwork, and schedule all surveys and checks without delay. Already having your solicitor and mortgage in principle ready to go can help speed the process. It’s essential that you remain an active part of the process.

Regularly check in with and, if necessary, push solicitors, lenders, and surveyors until final contracts are signed and money changes hands. Sellers deeply invested in a sale are less likely to withdraw and start again with another buyer.

The prospect of gazumping can add anxiety to buyers who already feel that many steps in the process are out of their control. But plan your search carefully to reduce your chances of disappointment while also ensuring that you can bounce back if you’re gazumped.