For those who are too young to remember the last time it was an issue, gazumping is what happens when a seller – having already agreed a sale – subsequently accepts a higher offer from someone else.
The first point to make is that gazumping is not illegal. But isn’t it morally wrong? Well, that rather depends on your point of view. So, while buyers who have been gazumped will tend to regard it as a pretty low trick, the ones doing the gazumping may view it as nothing more than a perfectly legitimate use of their greater buying power. Then of course there is the seller, who might see it simply as a way of ensuring they get the best possible price for their home.
That’s not to say that I condone the practice, however. Far from it, in fact. Being gazumped is no joke – particularly if you have already incurred expense on things like searches and a survey.
So, to return to your question, how can you stop it? I’m afraid there is no easy answer. Some, for example, have called for gazumping to be made illegal. However, this would seriously distort the market by tilting the balance of power between buyer and seller hugely in favour of the former. After all, it’s worth remembering that the same legal leeway that allows the greedy seller to switch offers in mid-stream also enables the cynical buyer to renege on their earlier offer and put in a much lower one at the very last minute (a practice known as gazundering).
OK, so why not make them both illegal? Well, not only would this create a legal minefield, but more importantly it would be interfering in a fairly major way in what is essentially a free market. After all, when it comes to buying or selling our most valuable asset, why shouldn’t we have the freedom to change our minds, if we want to?
What this all boils down to is that as a buyer, your only and best defence against being gazumped is 1, to make your first offer your best offer, and 2, to ensure you are ready to proceed to exchange of contracts as quickly as possible. The shorter the time a transaction takes, the less opportunity for abuse by either party. In short, be as prepared as you possibly can.