A Beginner's Guide To Gazumping: UPDATED For 2021!

Written by Mathew McCorry

If you read my property blog now, that’ll be the end of it. I will not look for you, I will not pursue you. But if you don’t, I will look for you, I will find you and I will make you read it.

Help! I've been gazumped. Is house gazumping even legal?

If you’ve ever been a victim of gazumping, you’ll know the feeling. That deep sense of disbelief and frustration as the property that you through was your ‘forever home’, slips out of your hands. You’ve instructed solicitors, funded your surveys, paid mortgage arrangement fees – you’ve done everything. The only thing you neglected to do was take out a form of gazumping insurance. The one thing that would’ve served you well in this situation. Still, we learn from our mistakes and besides, you’re not alone.

As you’ll soon discover, it’s actually quite common for a seller to gazump a buyer and go back on their word, particularly when demand is high. Recently, there’s been talk of house gazumping becoming a trend particularly in rural locations, as buyers flee the city in the ‘race for space’. Data from Halifax shows that in-between June and November of 2020, house prices experienced their quickest 5-month gain since 2004. A gain that probably wouldn’t have been so vast if it wasn’t for gazumping.

So with this in mind, how many people have been gazumped across England and Wales? And what is the financial impact of house gazumping? We reveal all…

Here for something specific about gazumping? Perhaps you want to know if it's legal or if it can be stopped? Whatever information you're after, use the menu below to find your answers FAST!


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What is gazumping?

The action of gazumping is when a person is a perspective buyer and has an offer accepted verbally on a property by the selling party, but someone then offers higher and completes the purchase.

Gazumping can occur any time before exchange of contracts because until then the buyer doesn't legally own the property. So that means in that time a cash buyer could use their position to drive the sale in their favour or someone could simply submit a higher bid.

Well, that's the case across England and Wales at least. In Scotland regulations are slightly different. Offers between two parties in Scotland are legally binding from the offset. A regulation enforced by the Scottish government to put a stop to gazumping.

What happens in most cases is that the seller is trying to maximise their profit, even in some cases if it means opting for a slightly more risky strategy. It's this that has given gazumping its bad reputation and led to many campaigning for it to be abolished.

Sometimes a seller will offer you the chance to meet the offer made, but this will depend on your position and whether you are willing to up your offer. We say 'willing' because the majority of buyers don't fancy doing business with someone who has gazumped them. Hardly surprising.

Is an accepted offer on a house ever legally binding?

Unfortunately not. Just because an offer is accepted it does not mean it's legally binding. For that you need contracts to be exchanged. Before then though you'll still be liable to being gazumped, but you yourself will also have the ability to gazunder the seller should you find an issue with the property or just fancy having a haggle.

FYI: If you as a seller is slow and uncooperative, then house gazundering can actually be a useful tool. Threaten to gazunder a seller and they’ll likely take you more seriously as a buyer, particularly if they’ve got very little interest elsewhere.

However, if an offer on a house is accepted in Scotland it is legally binding. Once it's been made a formal offer, it becomes part of your legal contract, known as 'missives'.

What's the research?

Market Financial Solutions (MFS) questioned over 750 home owners who had purchased property in the UK over the last 10 years. They were asked how many of them had been gazumped, why it had occurred, and how it affected their sale.

The results were pretty shocking.

Despite the small sample size, the amount of buyers who had lost out on a house due to gazumping was worryingly high. Maybe a sign that being gazumped is indeed becoming a trend that we should be paying more attention to.

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How many people had been gazumped?

Of those surveyed, nearly a third (31%) had been gazumped and lost out on a home. However the hot spot was in London, where almost half (47%) of buyers had been gazumped! A trend that didn't cease throughout 2020 and is set to continue throughout 2021 as the market continues to grow.

In an interview with the Evening Standard, Dylan James, Director of Hyde Park estate agents in London, admitted this was the case, commenting that "Gazumping has started again" due to the fierce competition in the London Market. Question is, will gazumping ever be stopped?

Is gazumping legal in the UK?

Unfortunately yes, property gazumping is entirely legal in the UK until the point at which contracts are exchanged. Therefore, it's possible to instruct solicitors, pay for searches, go ahead with a RICs survey and even buy new furniture, only to find that you've been gazumped and your sale has fallen through. Despite there being countless calls to revisit legislation, to the best of our knowledge, no legal changes have yet been made. However, due to the spout of gazumping experienced during the COVID pandemic, the likelihood of the laws around house gazumping in the UK being revisited, we'd say is actually quite high!

What are the implications of gazumping?

The implications of gazumping differ depending on your situation and how quickly you are gazumped. The best case scenario is to be gazumped early on in the sale, when very little in the way of money and time has been exchanged. Of course, as a buyer you'll still lose out on your property, just less so financially and in terms of time. It's the costs that come after a late gazump, which make taking out house buying insurance against gazumping a wise precaution.

Get gazumped late on the sale (typically at the 3-4 month mark) and you actually take quite a hit. You can lose out on conveyancing and survey costs, mortgage arrangement fee and even moving costs, as booking removal well ahead of time is essential! Also, if you've sought mortgage advice then there'll likely be an intermediary fee (finder's fee) that you'll have to pay before completion too. It was found that roughly 39% of buyers are liable for fees such as these. According to Which?, the overall cost of a sale falling through on average is £2,899.

But, while the implications of gazumping only apply to certain situations, the threat of it is very much there. Even in Scotland where a verbal offer is legally binding, buyers can still be repeatedly outbid in the early stages of a property purchase. The best way to think of gazumping is like a 'Go Directly To Jail' card in a game of Monopoly. There's always the chance it could be dealt to you, and if so it could cost you the entire game, but whether it actually is or not remains to be seen.

Is gazumping unethical?

Yes, overall we're pretty confident anyone would conclude that gazumping is unethical. However, how unethical depends on the situation as well as how a seller goes about doing it. To get your head around why gazumping can occur, it can be helpful to see the sale from the seller's perspective.

The most typical scenario where you'll come across house gazumping in the UK, is as follows:

The seller has had the property on the open market for a long while. They've recieved little interest and have been bullied countless times by their agent to lower the price. Regrettably, they have.

You've then come along and secretly fallen in love with the place, only you haven't told them that. Perhaps you could sense they were eager to sell and after a couple of day pretending to think about it, submitted a cheeky offer, knowing that they've likely accept. And they did. Fed up of being on the open market, they accepted your cheeky offer and proceeding with the sale.

However, during the time in which your sale was going through, they were approached by a new party. This one ignored the agent's sold board outside and came directly to them (i.e. no estate agent fees). Turns out they're also a cash buyer who's more than happy to pay their original asking price and would plan to be completed by the end of the month.

In this case, you should be able to see that at least from a seller's perspective, gazumping you would make sense. Not only by doing so do they achieve the price they originally wanted, but they also get the added bonus of a speedy completion and not having to foot the agent's fees. Saying that though, if they did choose to try and cut the agent out so to speak, they would have to look very carefully over their contract. It's likely the agent will have a written in a caveat to try and prevent them from doing so.

FYI: Gazumping can be made more ethical if the seller is cooperative. By that we mean, inform you well in advance that they're thinking of doing so and pay to cover your gazumping insurance, so the only thing you're actually going to miss out on is their property.

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Can we ban gazumping?

Of those surveyed, 80% claimed they would back a ban on house gazumping across England and Wales. A percentage that was particularly high amongst the elderly; 90% of over 55s would support a ban on gazumping.

In October of 2019, there was talk within the government of a new form of legislation that would tighten up the rules around house gazumping, however the initiative was later scrapped.

Do estate agents allow gazumping?

While it's possible that in some cases an estate agent would encourage house gazumping, it's unlikely they ever would. Here's 3 reasons why:

  • Time - To an agent, time is everything. They never have enough of it in the day, especially when the property market is thriving. The last thing they want is a sale to fall through and to be sent kicking and screaming back to square one. By doing so, all the time they've invested in the sale is lost.
  • Money - When you consider the figures, a seller who gazumps for a higher price isn't actually going to earn the agent that much more. For instance, if a house gazumping gets a buyer an extra £10,000, if the agent has a fee of 1% they'll only see £100 of that. Hardly worth it for the time and effort that a collapsed sale would cost them.
  • Buyer disruption - If an agent was to encourage gazumping, it could seriously harm their reputation and potentially scare buyers away, costing them valuable business. The same reputation is also likely to discourage sellers from listing their property with them too. So in both respects, encouraging gazumping doesn't make business sense for an agent.


Want to know more about an agent's stance on gazumping. Their estate agent gazumping policy is a great place to start!

How do I stop being gazumped?

Gazumping isn't the most pleasant experience, especially if you've been a victim to it more than once. Although, don't get too disheartened just yet as there are actually quite a few ways how to avoid being gazumped. Here's just a few ways that you can do so...

    Be QUICK!

    One of the easiest ways how to prevent gazumping is by doing everything in your power to encourage a quick sale. The quicker the sale, the smaller the window will be for the seller to even consider a gazump manoeuvre. Equally, this tactic also means there's less chance of someone encouraging the seller to gazump you while the sale is going through. I suppose you could call it a win-win.

    Ensure the property is taken off the market

    Another nifty tactic to protect you against house gazumping is to immediately get your seller's estate agent to withdraw the property from the market. This includes erecting a Sold board, taking it off any property portals such as Rightmove and informing their database of buyers that it is now not for sale. How quick you're able to do this will obviously depend on the seller too. Either way though, their reaction gives you a good indication of how dedicated they are to the sale. Doing so, should not only make you appear as a reliable buyer to the seller, but will also reduce the likelihood of you being gazumped last minute.

    Form an anti gazumping agreement

    Arguably the simplest way how to deal with gazumping is to confront it head on and get into a anti gazumping agreement with your seller. Essentially, this would see both buyer and seller agree on a deposit of the total sales price - usually this would be expressed as a percentage. That would then become part of a legally-binding agreement, which both parties would be liable to forfeit if they were to pull out of the sale.

    Communicate and build strong rapport

    Strong communication is what holds any house sale together, so why not utilise this and use it to protect you against gazumping? It's a well-known fact that us humans are emotional creatures, which is why establishing a good rapport with your seller is so valuable. Connect with your seller on a personal level and they'll find it a whole lot harder to gazump you if they are indeed presented with the chance.

    Invest in gazumping insurance

    If the only aspect of gazumping you're really concerned about is the cost, then simply investing in a form of gazumping insurance (otherwise known as Home Buyer's Protection Insurance) may be all you need. This is insurance that will cover the cost of any expenses caused by gazumping, such as legal fees, survey costs, mortgage arrangement fees and more. Although, every policy will differ, so we'd always advise you read the small print before making your choice. We found policies from as low as £69!

NOTE: Gazumping insurance will NOT preventing gazumping, merely cover the costs.

Would you gazump someone?

Think that because most people believe gazumping is unethical that it'll deter them from doing it? You'd be wrong.

Out of the survey above, a whopping 43% of people confessed that they wouldn't be against gazumping someone! 66% of these said it would be because of an increase in competition meaning they receive a higher offer.

Over a third of people who had one or more purchases fall through, said that the reason why was them or someone else in the chain not being able to get their mortgage approved in time. This figure was higher for younger house buyers (aged 18 to 34) where it sat at 49%!

What to do if gazumping means your buyer pulls out before exchange?

If either you or someone else in the chain has been gazumped, which has given your buyer cold feet, then you've got a buyer to find FAST!

You could of course go back to your agent and ask them to reach out to any buyers who showed interest, but the chances of that being FAST is very slim. The majority will have likely moved on, submitted offers elsewhere or maybe even stopped their search altogether. What you need is a buyer who comes with no strings attached. Someone who can swoop in and repair your broken chain FAST.

HINT: If that's the case, you can stop your search right about now...

As one of the UK's leading companies that buy houses for cash, we can help you overcome the effects of gazundering in a matter of days - just 7 in fact! What's more we'll cover your legal fees too and even help you negotiate on your onward purchase. All perks that can hopefully balance out any costs you've incurred due to a spout of gazumping.

Sound like a plan? Get your FREE cash offer for your home today!

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