Gazumping is when a seller accepts a verbal offer on a property, but then accepts a higher offer from someone else before the initial deal goes through. The phrase is used mostly in the U.K.

While you need a solicitor and legal help for much of the process of buying a home in the U.K., there is still a crucial part of the journey that is dominated by the old fashioned idea of a “gentleman’s agreement.”

When you spot a property that you like the look of, you might decide to put in an offer with the seller or the seller’s real estate agent.

In many parts of the world, if the seller then accepts that offer, there is a legally binding agreement or an exchange of money to seal the deal. You may pay a deposit in order to secure the home and have it taken off the market, while you go through the steps of getting a mortgage, for example. In the U.K., however, when you put in an offer, and your offer is accepted, you have to cross your fingers that it will stay that way until you exchange contracts. “Exchange” is the legally binding bit where your seller is obliged to sell to you, and will lose a lot of money if they don’t. But it can take several months to get there.

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There is no law to prevent the seller reneging on your agreement at any stage in the process until you’ve exchanged, even if you are well under way, organizing a mortgage offer, paying for surveys and a solicitor to act on your behalf, and you have invested time and money in the buying process.

You may ask for the home to be taken off real estate agent’s sites—often you will see properties that have been offered with the tag “sold, subject to contract”—but you are reliant on the unwritten agreement from the seller that they will stick to your offer, and not look elsewhere.

Unfortunately, sellers do not always honor their gentleman’s agreement.

Gazumping is used mostly in the U.K. Photo: Pixabay

Sometimes, another buyer may come along with a higher offer, enough to turn a seller’s head. And if their head is turned, you may get gazumped.

Usually gazumping happens because another buyer has offered more money, but it could also be because the seller thinks you are taking too long to move toward exchanging contracts and they want a quick sale, or perhaps you cannot complete until your existing property is sold, and the seller gets fed up of being in a chain.

There is not a lot you can do about it, even if it has cost you money wasted in surveys.

If you want to protect yourself against the costs of being gazumped you can buy home buyer protection insurance, which will pay out to cover the costs of things like conveyancing and survey fees you may have lost if the sale falls through. You cannot insure against the hassle, however.

Gazundering is similar to gazumping, but it’s where a buyer lowers their offer at the last minute, usually several weeks or months after it has been accepted or just before exchanging contracts. It usually forces the seller into the difficult position of having to sell the property for less if they want the deal to go through.

Again, there is nothing to legally stop you gazundering, but along with gazumping, it is frowned upon. The property buying process can be stressful enough without being let down by your buyer or seller.