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Is gazumping ever acceptable? Is it legal? And how does it all work? Find out more, and why having your mortgage in place could help prevent you being gazumped.

Key points

  • Gazumping is when a seller accepts a higher offer from a second source after they've already accepted a previous offer
  • For the homebuyer it can be draining and costly, particularly if they've paid for surveys and other costs
  • You're not safe from gazumping until contracts are exchanged
  • Getting a mortgage offer as soon as possible reduces the gazumping risk

Gazumping is a funny word. It sounds rather like a verb for riding a space hopper but it's actually much less fun, and can mean heartbreak, distress and legal battles.

Gazumping has always been a very real problem for house buyers, and in times when the housing market picks up and competition for properties increases, it's likely to get even worse.

What is gazumping?

Gazumping is when a seller accepts an offer on their property but then agrees to accept a higher offer from a different buyer.

The original, would-be buyer has then been gazumped, and the seller rather than the new buyer is considered the gazumper.

Why is it bad?

You might wonder why gazumping is a problem. After all, the seller wants the best price for their property and, if someone is willing to pay more, why shouldn't they take it?

However, gazumping can leave the victim both financially and emotionally drained. Try our mortgage calculator

By the time an offer has been made on a home, they've probably spent money on conveyancing fees and paid a lawyer to start the paperwork.

When they lose the home, all that money is simply down the drain.

The emotional impact can be just as hard. The buyers are likely to have emotionally committed themselves to the property. Losing it can be an incredible wrench.

It's also bad for estate agents. In the short term they benefit, as their fee rises with the higher price. However, the gazumped buyer is far less likely to use their services again and it can really damage their reputations.

Should the gazumped buyer up their offer?

Once contracts have been formally exchanged, there can be some pretty serious financial implications for both parties if they attempt to withdraw from the sale

Victims of gazumping have a tough decision to make.

Do they increase their own offer in order to outbid the new buyer, or do they simply lose all the time and money they've already invested in the sale?

If you're in such a position then bear in mind that the same thing could happen again if the other buyer is determined, or if it's a popular property.

You should also question whether or not you can afford a higher price, or if it would leave you dangerously stretched.

Isn't gazumping illegal?

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

"Sadly gazumping is perfectly legal until exchange. Exchange of contracts marks the stage in the transaction when a binding contract comes into existence," said Helen Barry, head of residential property at Hugh James.

"Before exchange, no contract exists between the buyer and seller, and either is free to change their mind about the transaction and can withdraw from it without any penalties (this includes gazumping or gazundering)."

 In Scotland gazumping isn't exactly illegal, but it is very rare indeed because of the way the property market works north of the border. There, it's solicitors who sell homes and these solicitors are bound by anti-gazumping rules.


These prevent them from accepting offers from other buyers once one has been accepted.

The individual property seller could, in theory, find a higher offer themselves - it's just very unlikely.

When are you safe from gazumping?

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

"This is usually a financial penalty and typically includes the loss of the deposit monies.

You can go some way to protecting yourself from gazumping by asking the seller to take the property off the market as soon as your offer has been accepted

"Where a deposit of less than 10% of the sale/purchase price has been paid, the defaulting party is still liable for the full 10%.

"Until Exchange you are at risk of gazumping or gazundering which is why you need to exchange at the earliest opportunity."

Before you reach that stage, you can go some way to protecting yourself from gazumping by asking the seller to take the property off the market as soon as your offer has been accepted. However, it's important to get this agreement in writing.

Some buyers ask the seller to enter into an agreement not to consider any other offers for a specified period of time, meaning they could sue them for breach of contract if they were then gazumped.

Another possibility is for both the buyer and the seller to pay a pre-contract deposit which they lose to the other party if they withdraw from the sale. If you're really worried about gazumping then talk to your solicitor about your options.

Why can a seller accept two offers at the same time?

It might surprise you to hear that in England and Wales a seller can accept two offers at the same time. This is known as a contract race and whichever buyer exchanges contracts first is entitled to buy the property.

Don't worry though, you can't be in a contract race without being informed by the seller's solicitor, so this can't take you by surprise.

Make sure your mortgage is ready

See also:

One way to reduce the risk of gazumping is to have your mortgage approved in principle.

This means you're ready to get the paperwork moving as soon as your offer is accepted.

You can compare mortgage rates through our website.

Getting expert mortgage advice can speed up your paperwork and reduce the gazumping window, so it's an important part of protecting your purchase.

By Felicity Hannah