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What is gazumping?

If you’re a buyer in search of your dream home, it’s important to be aware of gazumping and how to avoid it. Here’s what you need to know.

If you’re a buyer in search of your dream home, it’s important to be aware of gazumping and how to avoid it. Here’s what you need to know.

Written by
Sajni Shah
Consumer expert on money and utilities
Last Updated
21 DECEMBER 2023
7 min read
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What is gazumping?

Gazumping is when a seller, despite having verbally accepted your offer to buy their property, accepts another (often more appealing) offer in its place, before contracts have been exchanged and the sale is complete.

Although it's rare, gazumping can also happen after the exchange of contracts. It would be a breach of contract, but a seller may decide that the higher offer is so good that it's worth risking a claim.

If you get gazumped, not only do you lose out on the dream home you’ve already started remodelling in your head, but you could also lose all the money you’ve spent on solicitor fees and property searches getting ready for the sale.


Is gazumping legal?

It seems extremely unfair, especially considering it could result in you losing hundreds of pounds in non-refundable conveyancing and survey fees but, yes, gazumping is perfectly legal.

That’s because a verbal agreement for the sale of land between the buyer and seller isn’t legally binding, although most other verbal agreements are legally binding. Only once written contracts have been exchanged and signed by both parties is the agreement set in stone.

Unfortunately, the house-buying process can be slow going, often leaving a good few weeks between the verbal acceptance of an offer to buy and the actual signing of the contracts.

The reality is that during this time, you’ll have probably had a property survey done, given your conveyancer the go-ahead to start doing their part and applied for a mortgage with your chosen mortgage provider. In other words, you’ll have probably already spent a sizeable sum of money.

Gazumping is less common in Scotland than in the rest of the UK, because the property-buying process is different. Properties are often marketed by solicitor estate agents and once they accept an offer on behalf of a client, they can’t accept another. Sellers can switch solicitors, however, and not all properties are marketed by solicitors, so gazumping still happens.

Why does gazumping happen?

Usually, it’s because the seller has received a more attractive offer from another buyer. This is common when the demand for a property is high or the property market is strong in general. However, a better offer isn’t the only reason buyers might be gazumped.

Gazumping can also happen if the seller is keen for a quick sale. So, if they’re approached by another interested party who already has a mortgage offer in place, whereas you don’t, they might be persuaded to accept that offer despite having already verbally accepted yours.

Be wary though. Sometimes, a seller and their agent will attempt to make you think you’re about to be gazumped, in an effort to see how much extra money you’re willing to pay for the property. Is gazumping illegal in this respect? Surprisingly not. Unethical, yes.

How to avoid gazumping

To save yourself disappointment and wasted money, you’ll need to do everything in your power to avoid being gazumped by a seller. Here are some tips:

Don’t delay
If you’re serious about buying a property, act quickly once you’ve decided to put in an offer. You’ll need to arrange for a property survey, hire a conveyancing solicitor to conduct the required searches and get a mortgage offer, before you can exchange contracts and legally bind the purchase. 

Choose a conveyancing solicitor in advance
They’ll handle all the legal elements of buying a property for you. Do your research beforehand to see what property solicitors are available in your area, check out the reviews and get some quotes so you can make an informed decision. Then give your chosen conveyancing solicitor a heads up that you’re likely to use their services in the near future. 

Choose a property surveyor in advance
Similarly, it helps to do your research on local property surveyors in advance and get some quotes, so you can arrange your surveys as soon as you make an offer.

Get a ‘mortgage in principle’
A ‘mortgage in principle’ is not an official mortgage offer. However, it can prove to the seller that you’re a serious buyer. It can also speed up the process once you’re ready to apply for an actual mortgage. Read our guide for top tips on getting your mortgage approved

Get insured
Home buyer protection insurance is a worthwhile consideration for buyers and can protect you from the financial pitfalls of gazumping. If you do fall victim to the practice of gazumping, this type of insurance makes it possible for you to claim back a certain portion of your survey and conveyancing fees. Unfortunately, you can’t compare home buyer protection insurance with Compare the Market.

It’s advisable to regularly communicate your progress to the seller. By keeping them up-to-date, they may be less inclined to accept another offer. If you can establish a friendly relationship with the seller, maybe by sending a thank you card explaining how much you love the property, they’re less likely to feel okay about gazumping you. But keep it respectful and unobtrusive, or you risk pushing them the other way.

Ask the seller to take the property off the market
They’re not obliged to do this, but it won’t hurt to ask. If the property isn’t being advertised, the chances of a new offer coming through are pretty slim. It may help to convince the seller to do this by proving you’re a serious buyer, by having a mortgage agreement in principle and a conveyancing solicitor ready to go.

Sign a ‘lock out agreement’
Essentially, a ‘lock out agreement’ is a contract that grants the buyer exclusive rights to purchase the property within an agreed time frame. Usually, both seller and buyer pay a small percentage of the property price as a deposit, which they forfeit to the other party if they try to back out of the sale or change the price within the time limit stated in the contract.

You have to pay extra in legal fees to set up this type of agreement but, as long as the requirements of the contract are met, gazumping shouldn’t be a possibility. Just like taking the property off the market, the seller isn’t obliged to agree to this – but it’s worth a try if you’re worried.

What to do if you’ve been gazumped

If you find out you’ve been gazumped, all is not lost. You’ll have the option to make a higher counter offer if your budget allows. Just be careful not to make an impulsive decision in the heat of the moment. Take the time to review your finances and consider your options. And be aware that if it happened once, it can happen again. 

If you’re not able or willing to make a higher offer, you can also try to appeal to the seller to reconsider. Highlight anything that works in your favour as a buyer. Maybe you’re days away from being ready to exchange contracts, instead of weeks away, and you’re a flexible first-time buyer with no chain. Or perhaps you can appeal to their better nature by explaining how much you love the property and want it to be your family home. At this point, there’s nothing to lose by trying one last time to change their mind.

Frequently asked questions

What is gazundering?

Gazundering is when a buyer lowers their offer at the very last minute. This is hugely frustrating for sellers in a chain, who might feel they need to accept the lower offer or else lose the property they themselves have made an offer on.

Although gazundering is legal, it’s not exactly ethical. The only justifications for lowering an offer are because the buyer has discovered something unfavourable about the property, or if local prices have fallen significantly since the original offer was made.

Like gazumping, gazundering is less common in Scotland because solicitors acting on behalf of clients can’t usually lower an offer. However, buyers can always find another solicitor if they’re determined to gazunder.

How to avoid gazundering

  • Set the right price for your property in the first place and you’re less likely to attract buyers who might try to whittle it down.
  • Get problems fixed before the buyer’s survey, to avoid them trying to reduce the price at the last minute.
  • Move quickly towards exchange, giving the buyer less time to renegotiate the price.

What does Sold STC stand for on housing listings?

If you’re scanning websites looking for available properties, you may notice some are listed as Sold STC – or Sold Subject to Contract. That means an offer has been made and accepted on the property, but the sale is not final as the buyer and seller are yet to exchange contracts.

If a buyer was to make a higher offer on the property at this time and it was accepted, they would be gazumping the original buyer.

The content written in this article is for information purposes only and should not be taken as financial advice. If you require support on the products discussed here, please speak to your bank/lender or seek the advice of an independent professional financial advisor. We also have more information on our Customer Support Hub.

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Sajni Shah - Consumer expert on utilities and money

Sajni is passionate about building products, allowing Compare the Market to help you make great financial decisions. She keeps track of the latest trends and evolving markets to find new ways to help you save money.

Learn more about Sajni

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