What Is Gazumping, and Is It Legal in the UK?

Gazumping is when a seller accepts your offer, then accepts a higher one from someone else and sells to them instead. In England and Wales it is legal, because an accepted offer is not legally binding until contracts are exchanged. Until then, either side can walk away. You can reduce the risk, but not remove it.

What gazumping means

Say you offer £300,000 for a house and the seller accepts. The agent marks it "sold subject to contract", you instruct a solicitor and book a survey. Three weeks later another buyer offers £315,000, and the seller goes with them. You have been gazumped.

The word is slang, but the situation is simple: the seller has agreed a price with you and then sold to someone else for more, before anything was signed.

Is gazumping legal in the UK?

In England and Wales, yes. An accepted offer is an agreement in principle, not a contract. The government's guide to selling a home puts it plainly: neither side is under any legal obligation until signed contracts are exchanged. So a seller who accepts a better offer before exchange is not breaking the law, however unfair it feels.

After exchange, it is different. Exchange makes the deal legally binding. A seller who pulls out after that may have to pay your costs and compensation.

Scotland works differently. A Scottish purchase becomes binding once the missives (the formal letters between solicitors) are concluded, and sellers often set a closing date for offers. This article covers England and Wales.

Why estate agents keep passing on offers

Estate agents are legally required to tell the seller about every offer they receive, even if the seller has already accepted one. Failing to pass on an offer promptly and in writing counts as an "undesirable practice" under estate agency law.

That is why asking for a property to be taken off the market helps but does not stop gazumping on its own. The agent may stop advertising it, but must still pass on any offer that comes in.

If you think an agent has treated you unfairly, complain to the agency first. Every estate agent must belong to a government-approved redress scheme, which can look at the complaint if the agent does not resolve it.

Can a seller change their mind after accepting an offer?

Yes, for any reason, right up to exchange. A higher offer is the most common, but not the only one. Sellers also pull out because:

• another buyer can move faster, for example a cash buyer or someone with no property to sell
• the sale has gone quiet, and they are worried it is not moving
• they expect prices to rise and decide to wait
• the buyer's survey or valuation comes in low, and they would rather not renegotiate
• their own plans change, such as the purchase of their next home falling through, or a family or money change

What is gazundering?

Gazundering is the reverse: the buyer lowers their offer at the last minute, usually just before exchange, knowing the seller is committed to a move and may not want to start again. It is legal for the same reason gazumping is: nothing is binding before exchange.

There is a difference between gazundering and a fair renegotiation. If your survey finds a serious problem, asking for a lower price is reasonable. The government's guide warns that trying to renegotiate late in the sale can cause delays and risks the sale falling through.

How to reduce the risk of being gazumped

Most sellers who switch buyers do it because the new buyer looks faster or more certain. So the best protection is to look like the safe bet from day one.

• Get a mortgage decision in principle before you offer, and tell the seller you have one, or that you are a cash buyer.
• Tell the seller where you stand. If you are a first-time buyer, have already sold, or are renting, you are not in a chain, and that is worth saying.
• Have a solicitor ready, and instruct them as soon as your offer is accepted.
• Send your ID, proof of funds and gifted-deposit paperwork straight away, so nothing waits on you.
• Book your survey promptly so it is not the last thing outstanding.
• Keep in touch with the agent. A sale that looks active is less likely to tempt a seller to listen to other offers.
• Ask about a reservation or exclusivity agreement. Some sellers will sign an agreement, sometimes called a lock-out agreement, not to deal with anyone else for a set period. Some include compensation if the seller pulls out. It must be in writing, and your solicitor should check it before you rely on it.

The shorter the gap between offer and exchange, the less time there is for a higher bid to arrive. Chains slow things down, so it helps to understand how a property chain works before you offer.

What you can do if you are gazumped

Before exchange, you have no legal claim against a seller who sells to someone else, unless they signed an agreement promising not to. Your options are:

• match or beat the new offer, if it still makes sense for you
• walk away and keep looking

Either way, ask your solicitor what you owe for work already done. The government's guide suggests asking, before you instruct anyone, what you will be charged if the purchase does not go ahead. Money spent on a survey or searches is usually not recoverable.

On our residential conveyancing files, you get a written fixed quote before work starts, and a named solicitor from start to finish.

Questions people ask

What does gazumping mean?

Gazumping means a seller accepts your offer on a property, then accepts a higher offer from another buyer and sells to them instead. It happens between the offer being accepted and contracts being exchanged, when the sale is agreed but nothing is yet legally binding. Gazundering is the opposite: a buyer cutting their offer just before exchange.

Is gazumping legal in the UK?

In England and Wales, yes. An accepted offer is not a contract, so a seller can accept a higher offer at any point before contracts are exchanged. After exchange, the deal is binding and a seller who pulls out may owe you costs and compensation. In Scotland, the purchase becomes binding once the missives are concluded.

Can a seller pull out after accepting an offer?

Yes. Until contracts are exchanged, a seller can pull out for any reason, whether for a higher offer, a faster buyer, a change of plans or a falling market. You cannot take legal action unless they signed an agreement promising not to. After exchange, a seller who pulls out may be liable for your costs and compensation.

Can an estate agent stop gazumping?

Not entirely. Estate agents must pass on every offer they receive to the seller, even after one has been accepted. Asking for the property to be taken off the market reduces the chance of new offers, but does not stop them. A written exclusivity agreement with the seller gives more protection than an agent's promise.

How can I avoid being gazumped?

Be the buyer the seller would not want to lose. Get a mortgage decision in principle before offering, instruct a solicitor as soon as your offer is accepted, send your ID and proof of funds straight away, book your survey quickly and keep in touch with the agent. You can also ask the seller to sign an exclusivity agreement.

What is gazundering?

Gazundering is when a buyer lowers their offer at the last minute, usually just before exchange, hoping the seller is too committed to say no. It is legal in England and Wales, for the same reason gazumping is. Asking for a reduction because your survey found a real problem is a fair renegotiation, not gazundering.

Do I get my money back if I'm gazumped?

Usually not. Survey fees, search fees and legal work already done are generally lost, because the seller owed you nothing before exchange. The exception is if the seller signed an exclusivity agreement promising compensation. Ask your solicitor at the start what you will pay if the purchase falls through.

Sources

Offers, sold subject to contract, exchange, what to ask a solicitor: gov.uk/government/publications/how-to-buy-a-home/how-to-buy

No legal obligation until exchange; agents must pass on all offers: gov.uk/government/publications/how-to-sell-a-home/how-to-sell-a-home

Estate agents' duty to forward offers: legislation.gov.uk/uksi/1991/1032/schedule/3

Scotland: mygov.scot/buying-a-home/making-an-offer

This is general information about buying property in England and Wales, not advice on your purchase. Your own position depends on facts we would need to see.