Gazumping
Gazumping occurs when a seller accepts a verbal offer on their property from one potential buyer but then accepts a higher offer from another buyer before the sale is legally completed.
What is Gazumping?
Gazumping is a term that specifically refers to the situation in the UK real estate market where a seller initially accepts an offer from a potential buyer, but later accepts a higher offer from another buyer, leaving the first buyer out of the transaction. This practice can occur because, in England and Wales, a property sale is not legally binding until contracts have been exchanged. Gazumping highlights the volatile nature of the property buying process and can lead to increased costs and disappointment for the initial buyer, who might have already incurred expenses for property surveys, legal fees, and mortgage arrangements.
The phenomenon of gazumping often occurs in a seller's market, where high demand and low supply of properties give sellers the leverage to accept higher offers. This situation can be frustrating and financially damaging for buyers, leading to calls for reform in the home buying process. However, until changes are implemented, buyers and sellers must navigate the complexities of the current system, often seeking strategies to mitigate the risk of gazumping.
Frequently Asked Questions
Gazumping is a term that you may have heard before, but you might not be sure what it means. Here are some common questions and answers to help you understand what it means.
