Fact 45. Gazumping Explained: What It Is, Why It Happens, and How Buyers Can Protect Themselves

A clear guide to why gazumping happens, how the law treats it, and what buyers can do to reduce the risk.

Gazumping is one of the most frustrating experiences a homebuyer can face. You find the perfect property, negotiate a price, instruct solicitors, and begin the conveyancing process. Then suddenly, just when you think everything is moving smoothly, the seller accepts a higher offer from someone else. This is gazumping, and while it can feel deeply unfair, it remains entirely legal in England and Wales until exchange of contracts. 

Although it cannot be prevented completely, buyers can minimise the risk with careful planning, fast progress, and clear communication between all parties.

This article provides an in-depth examination of what gazumping is, the legal and economic factors behind it, how estate agents play a role, and the practical steps buyers can take to protect themselves. It also looks at insurance options and other risk-reduction tools, as well as broader reforms that have been discussed in the property industry.

Understanding Gazumping

Gazumping occurs when a seller accepts an offer from a new buyer despite having previously agreed to sell the property to someone else. The crucial point is that in England and Wales, a property sale is not legally binding until contracts have been exchanged. Prior to that moment, either party may withdraw without legal penalty, no matter how far along the process is.

Gazumping can happen at any stage before exchange, but is most common:

• Shortly after the initial offer is accepted, when other buyers are still making enquiries.
• After the survey results come in, when a seller realises the original buyer may renegotiate.
• When a competing buyer offers a significantly higher price.
• If the original buyer is moving slowly, causing the seller to lose confidence in the transaction.

From the buyer’s perspective, the emotional and financial consequences can be severe. Money spent on searches, surveys, legal fees, and mortgage arrangements may be unrecoverable, leaving the buyer out of pocket even though they have done nothing wrong.

Why Gazumping Happens

Although gazumping is often viewed purely as opportunistic behaviour by sellers, it can arise from several motives.

1. A higher financial offer
   The simplest cause is another buyer offering more money. In areas where properties are in high demand, sellers may feel pressure to accept an improved offer even if they have verbally agreed to the first one.

2. A faster or more reliable buyer
   If a seller senses that a buyer is slow, unorganised, or hesitant, they may be tempted to switch to someone who appears more proceedable.

For example:
• A cash buyer is often seen as a safer option than someone relying on a mortgage.
• A buyer with a complete chain is more appealing than one whose own sale has stalled.

1. Delays in the conveyancing process
   Lengthy delays can make sellers nervous, especially if they are in a chain and relying on the sale to progress their own purchase. Even if the delay is not the buyer’s fault, a seller may take action that seems unreasonable from the buyer’s perspective.

2. Market conditions
   Gazumping is more common in rising markets, where high demand pushes prices upwards. Conversely, in a slow market, gazumping is rare because sellers are grateful for any reliable offer.

3. Estate agent involvement
   Estate agents are legally required to pass on all offers to a seller right up until contracts are exchanged. Even if the seller has accepted an offer already, the agent must still communicate a later higher offer unless instructed otherwise in writing. Some agents may also encourage competitive bidding because their commission is usually based on a percentage of the final sale price.

Is Gazumping Legal?

In England and Wales, gazumping is legal because an accepted offer does not constitute a binding contract. A property transaction becomes legally binding only at exchange of contracts. Until that key milestone, either party may withdraw, change terms, or renegotiate.

The situation is very different in Scotland, where the legal system treats property offers differently. Once an offer in Scotland is formally accepted in writing through solicitors, it becomes legally binding much earlier. 

As a result, gazumping is extremely rare there.

In England and Wales, although gazumping is legal, some buyers feel it is unethical. A seller may sympathise but still feel compelled to accept a better offer, particularly if it allows them to afford the next property in their chain.

The Consequences of Being Gazumped

Being gazumped can lead to significant financial and emotional costs for buyers. Common losses include:

• Survey fees, often £300–£900.
• Local authority searches, typically £200–£400 depending on the region.
• Conveyancing fees for work already completed.
• Mortgage valuation fees or arrangement fees.

In most cases, these losses cannot be recovered. Buyers often feel a sense of wasted time and frustration, especially if they had already mentally committed to the property.

How Buyers Can Reduce the Risk of Gazumping

While gazumping cannot be prevented entirely, buyers can significantly reduce the risk through strategic action. The key is to move quickly, stay organised, and demonstrate reliability.

1. Get a mortgage agreement in principle
   Having an agreement in principle in place proves to the seller that you are ready to proceed. It also enables the legal process to move faster once the offer is accepted.

2. Instruct a conveyancer immediately
   Many buyers lose valuable days or even weeks before instructing a solicitor. Early instruction shows the seller that you are serious and eliminates unnecessary delay.

3. Book surveys promptly
   The sooner the survey is completed, the sooner you can confirm you are happy to proceed. Delays here are a common trigger for sellers to seek alternative buyers.

4. Maintain clear communication with the estate agent
   Keeping the agent updated gives the seller confidence in your progress. A silent buyer often looks slow, even when the delay lies elsewhere.

5. Ask the seller to take the property off the market
   Sellers may agree to remove the listing once they accept your offer. Although this is not legally binding, it reduces the likelihood of competing buyers discovering the property.

6. Consider a lock-out or exclusivity agreement
   A lock-out agreement gives the buyer exclusive right to purchase for a set period, usually 4–8 weeks. The seller cannot accept other offers during this time. These agreements do involve legal drafting and negotiation, and both parties must agree.

7. Use a reservation agreement
   Some sellers or developers offer reservation agreements, which require both sides to commit financially if they pull out for no good reason. These are increasingly used in new-build transactions.

8. Choose an efficient conveyancer
   A responsive, proactive conveyancing solicitor makes a huge difference to speed. Many buyers underestimate this when comparing quotes.

9. Get insurance against gazumping
   Homebuyer protection insurance can cover some of the costs if a sale falls through for reasons beyond your control. This is not a guarantee, but it can reduce financial stress.

10. Move forward without delays
    Provide documents quickly, answer queries promptly, and stay in regular contact with your conveyancer. Every day saved reduces the risk window.

Can Sellers Try to Avoid Gazumping?

Interestingly, some sellers also want to avoid gazumping because they view it as unfair or disruptive. Sellers can reduce the chance of being drawn into gazumping scenarios by:

• Setting a deadline for offers.
• Accepting an offer only after having seen proof of funds.
• Asking the buyer to commit to a fast timeline.
• Agreeing voluntarily to withdraw the property from the market.

Some sellers refuse to entertain competing offers because they value fairness or are worried about losing their original buyer. However, this is entirely voluntary.

Reforms Discussed in the Property Industry

The idea of banning or discouraging gazumping has been discussed several times by policymakers. Suggested reforms have included:

• Binding offers
• Reservation agreements becoming standard
• Faster digital conveyancing
• Greater transparency around property information

While none of these have yet changed the law, the direction of travel is toward improving certainty earlier in the transaction.

Is Gazumping Always Wrong?

Although buyers understandably feel wronged, the situation can be more complex. For example:

• A seller may receive an offer £20,000 higher than the agreed price.
• A buyer may be progressing slowly through no fault of the seller.
• A chain may be at risk of collapse unless the seller accepts a more reliable offer.

Some sellers would prefer to honour their first agreement, but the financial realities of moving house make it difficult.

Gazumping is a deeply frustrating experience, but understanding how it happens and how to minimise the risk can help buyers navigate the property market more confidently. Fast action, good communication, and choosing the right professionals can significantly reduce your exposure. While the law currently allows gazumping, buyers have tools at their disposal to make it less likely.

If you are concerned about gazumping, speak to your conveyancer early. They can explain the steps available to protect your position and help you complete your purchase as swiftly and securely as possible.