HomeOwners Alliance logo

Sign up to our newsletter for the latest property news, tips & money saving offers

  • Looking to buy a new home? Start here

What is gazumping and how to avoid it

As a buyer, when your offer has been accepted you may think it’s time to crack open the bubbly and start shopping for furniture, but be warned - you’re not quite home and dry just yet. We look at the act of gazumping, how it can set you back and how to avoid it.

Gazumping and how to avoid it

When you finally find a property you like and your offer is accepted, you may think it’s just a matter of time before you move in. But the house buying process can be long and arduous with lots of opportunities for things to go wrong. One of the worst things to happen is the dreaded act of ‘gazumping’.

What is gazumping?

Gazumping  – not to be confused with gazundering  is when another party makes a higher offer on the house you are in the process of buying and has that offer accepted, thus pushing you out of the purchase, setting you back to square one and back on the search for the perfect home.

This can happen at any time before you’ve exchanged contracts. In the majority of cases, this will happen because a higher offer is made and the seller wants to maximise the amount they obtain from the property. However, sometimes timing could be an issue – for example, if you’re taking too long to have a survey, sell your home or if your solicitor is dragging their feet, the seller may decide to reject your offer in favour of one from a buyer who is in a better position to move more quickly.

Gazumping is a worry, according to 2019 research by MFS, 31% of UK homeowners have previously lost out on a property as a result of being gazumped in the last decade.

Is gazumping legal?

Unfortunately gazumping is legal. While your offer may have been accepted, the agreement between you and the seller does not become legally binding until contracts have been exchanged. Indeed, if you take a look at property websites you’ll see many properties advertised but listed as ‘Sold STC’ which means an offer has been accepted but the sale is still “subject to contracts” being agreed and exchanged.

Since the exchanging of contracts comes fairly late in the sales process – after the buyer has spent money on surveys, arranged a mortgage, paid the conveyancer for local searches – buyers often find themselves seriously out of pocket if they are gazumped late on in the process.

What can you do to avoid being gazumped?

Get insured

If another buyer comes in with a much higher offer than you, there’s very little you can do to stop the seller accepting it. But you can insure yourself against this happening by taking out home buyer protection insurance. If the sale falls through because the seller changes his mind or accepts another offer, you’ll be able to claim back some of your conveyancing fees, survey fees and any other costs you may have had to pay out.

Home Buyers’ Protection Insurance can protect you in the event of being gazumped, or if the seller changes their mind. Find out more here >

 Be prepared

Before you make an offer on any house, if you are not a cash buyer, make sure you have a mortgage agreement in principle in place. It is also a good idea to have your solicitor lined up and all of the necessary documentation to hand. These are the types of things that can cause unnecessary delays if you’re unprepared.

Compare conveyancing quotes from our panel of quality assured conveyancing solicitors now

Move quickly

It is also helpful to move the process along as quickly as possible. Once contracts are exchanged, the agreement is legally binding, so you want to get to that point as quickly as possible. Keep in contact with your mortgage broker and conveyancing solicitor to keep the pressure on and ensure your case doesn’t fall by the wayside, and respond quickly to requests for information.

Ask for the property to be taken off the market

Sellers are not always keen to do this but it’s worth asking them to take the property off the market once your offer has been accepted. If the property is no longer being advertised, there’s much less chance of a higher offer being made and you being gazumped. You’ll have more luck if you offer something in exchange to show your commitment e.g. a survey undertaken as soon as possible after the offer has been accepted.

Arrange your survey — find and get quotes from local chartered surveyors now

Get to know the sellers

If you get along with the seller and they can see you’re a serious buyer who genuinely loves their property, there’s much less chance of them ditching you for a better offer. Keep them informed with where you’re up to in the process so they can see that you’re actively trying to move things along.

Agents and solicitors tend to want to avoid having clients contacting each other but there’s nothing to stop you from sending a thank you card or exchanging email addresses to keep in touch.

Consider a “lock out agreement”

A lock out agreement is essentially a contract between the seller and the buyer stating that the buyer has the exclusive right to buy the property within a certain period of time. Of course, the seller has to be willing to sign this but it may help to prove to them that you’re serious about wanted the property and will appeal to sellers that have had a sale fall through before or want to move fast. Speak to your conveyancing solicitor about what would be involved and the cost of drawing up the agreement.

Estate Agents and gazumping

There have been claims that estate agents – who earn a percentage of the sold price – have been known to encourage gazumping. But it’s unlikely to be intentional. Even after the seller has accepted an offer from one buyer, the estate agent is legally obliged to pass on any offer they receive. If this offer happens to trump the initial accepted offer, then gazumping seems inevitable.

Some unscrupulous agents (not all, just a few rotten eggs) may invent a higher offer at the last minute so that the buyer feels forced to increase their offer to avoid being gazumped. If you, the buyer, have had your offer accepted and the agent comes to you with news of a better offer, ask to see proof of it in writing. If it is a genuine offer, don’t immediately panic and increase yours. It’s important to know at the start of your property search what your maximum price is and stick to this, even if the agent is trying to whip you into a frenzy.  See what to do if the estate agent says a higher offer has been made

What to do if you are gazumped

If you’ve done everything you can to avoid getting gazumped and still hear that a higher offer has been made, then review your finances and consider whether you can gazump your gazumper with a higher counter offer. But be careful not to over-stretch yourself financially in the heat of the situation. And beware, you could be gazumped again.

If that isn’t an option, there’s only one thing left to do – sell yourself. Highlight absolutely everything that works in your favour, whether it’s that you’re a first time buyer with no chain to the fact you’re utterly flexible on moving date. Write to, email or phone the seller to explain how much you love the property, want to make it a family home, or whatever you think appeals most to your vendor.

Home Buyers’ Protection Insurance can protect you in the event of being gazumped, or if the seller changes their mind. Find out more here

Notify of
Oldest Most Voted
Inline Feedbacks
View all comments
close popup ×

Before   you go...

If you found this website useful, could you spare a minute to leave us a review?