What is gazumping and is it legal?

Who is this page for?

If you are worried about being gazumped by another buyer, then this page is for you. Find out more about gazumping and how you can stop it from happening to you.  

What is gazumping?

Gazumping is when someone else makes a higher offer on a house you are in the process of buying. Even if you have an offer accepted on a new home, someone can make a larger offer at this late stage in the process.

A rival bidder could also come in with a similar offer, but state they can complete the sale more quickly. For example, if they aren’t in a property chain, but you are.

If the seller accepts the offer, it means you miss out on the home.

This can happen before you exchange contracts. It might leave you feeling disappointed and frustrated. You may lose money on any surveys or legal work you’ve paid for.

Is gazumping legal?

Yes, gazumping is legal. Until you sign a contract, there is no legal agreement between you and the seller to sell the house to you.

Until you sign a contract the seller is free to accept a bid from anyone. This includes even after you have had a bid accepted. Even though it’s legal, it’s considered unethical.

How to avoid gazumping

You can take action that may reduce the risk of being gazumped. It’s not possible to avoid the risk altogether unfortunately. The seller is always free to accept another bid before you sign a contract.

Below are some steps you can take that may reduce the chance of getting gazumped.

Get an Agreement in Principle

Get an Agreement in Principle before you search for a new home. Agreeing a mortgage beforehand can make the buying process faster when you have an offer accepted on your dream home.

Arrange paperwork quickly

The faster you can complete the sale the better. Make sure you have all the paperwork and complete any checks as quickly as possible.

Keep in contact with your solicitor regularly to make sure everything is moving along as it should be. It can be a good idea to get confirmation that they have all the documents they need.

Arrange surveys quickly

The quicker you arrange a survey, the faster you should be able to complete the purchase. This means there is less time to get gazumped.

Line up legal help

You will need to hire a solicitor to complete the paperwork on your purchase. Choose your solicitor before you start the bidding process on a property.

Get the seller to take the property off the market

You could ask the seller to take the house off the market as part of your offer. If they accept, they will be unable to advertise the house to anyone else. This means that there is less chance for someone else to see the property and make a rival offer. This is up to the seller and they may refuse.

Get home buyers insurance

Protect yourself against any financial losses you might incur by getting home buyers insurance before you buy your new home. This will cover costs like legal fees that you might lose if you are gazumped.

Can gazumping happen in Scotland?

Gazumping can happen in Scotland. It is legal but not as common. In Scotland, solicitor estate agents sell houses. They are bound by certain legal standards, unlike estate agents in England and Wales.

Scottish law binds them to try and stop gazumping where possible. Once a solicitor estate agent accepts your offer, they cannot accept offers from other buyers.

The homeowner could still accept a higher offer if they advertise their house with a new estate agent.

The content on this page is for reference and does not constitute finance advice.

For impartial financial advice, we recommend government bodies like the Money Advice Service.

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