Gazumping and Gazundering: What you need to know

The process of buying or selling a home in the UK property market is a significant undertaking, and while often exciting, it can sometimes present unique challenges. Among the more frustrating experiences for both buyers and sellers are the practices of ‘gazumping’ and ‘gazundering’. But there is no need to feel intimidated by these terms – and understanding them is the first step to a smoother, more confident property journey.

In this article, we explain what gazumping and gazundering mean, why they happen, and, most importantly, how you can protect yourself and your interests. Our goal is to demystify these situations and provide you with practical, actionable advice to help you feel prepared every step of the way.

What is gazumping?

Simply put, gazumping occurs when you, as a buyer, have had your offer on a property accepted by the seller, but before contracts are legally exchanged, the seller accepts a higher offer from another buyer. This can be incredibly frustrating and disheartening, especially after you’ve invested time, emotion, and potentially money in surveys and legal fees.

It often happens in competitive markets where demand outstrips supply or when the legal process of exchanging contracts is slow, leaving a window open for new offers. While it feels unfair, it’s important to know that gazumping is not illegal in England and Wales, as a property agreement only becomes legally binding once contracts are formally exchanged. If you’ve experienced this, you’re certainly not alone.

What is gazundering?

Gazundering is the reverse scenario. This is when you, as a seller, have agreed on a price with a buyer, but just before the exchange of contracts, the buyer suddenly lowers their offer. This can catch sellers completely off guard, potentially leaving them with a difficult choice: accept a lower price or risk the entire sale falling through and having to re-list the property.

Gazundering can occur for several reasons, such as a downturn in market conditions, issues flagged in a last-minute survey or simply a buyer getting cold feet and trying to secure a better deal. While it can feel manipulative, like gazumping, it is also legal in England and Wales before contracts are exchanged.

Is gazumping or gazundering legal in the UK?

This is a common and crucial question. In England and Wales, both gazumping and gazundering are entirely legal. The reason for this lies in the process of property transactions: nothing is legally binding until contracts are formally exchanged. This means that until that point, either party can withdraw or change their terms without legal penalty.

This contrasts sharply with the system in Scotland, for example, where offers are legally binding much earlier in the process, making gazumping and gazundering far less common. The English and Welsh system, with its often slow transaction times and lack of early commitment, unfortunately creates an environment where these unsettling practices can occur, leading to uncertainty for both buyers and sellers. Understanding these rules is key to protecting yourself.

How to avoid being gazumped when buying a home

While you can’t eliminate the risk entirely, there are clear, actionable steps you can take to significantly reduce your chances of being gazumped:

• Ask for the property to be taken off the market: Once your offer is accepted, request that the seller or agent  marks the property as sale agreed on all of the listings (online portals, agency windows). While not legally binding, it shows commitment and reduces exposure to new offers.
• Move quickly: Be proactive with your mortgage application, instruct your solicitor immediately, and arrange your survey as soon as possible. Minimising delays reduces the window for a competing offer to emerge.
• Consider a lock-in or reservation agreement: Discuss with your solicitor the possibility of a formal agreement where both parties commit to a timeframe and potentially incur a penalty if they withdraw. These are not common but can offer some protection. They are very difficult, complicated, and expensive to draw up as there are so many issues that  potentially could happen, meaning these are very rarely exercised.
• Look into gazumping insurance: This type of insurance can cover some of your out-of-pocket expenses (like survey and legal fees) if your purchase falls through due to gazumping. Understand its limits and what it specifically covers.

How to avoid being gazundered when selling your home

As a seller, you can also take strategic steps to reduce the risk of a buyer lowering their offer at the last minute:

• Choose your buyer carefully: Don’t just accept the highest offer. Consider the buyer’s position – do they have their finances in place (mortgage in principle, cash buyer)? Are they in a chain, and if so, how strong is it? Fewer conditions often mean a more reliable buyer.
• Set a clear, realistic timeline: Work with your estate agent and solicitor to establish a firm, achievable timeline for exchange and completion from the outset. Communicate this clearly to your buyer.
• Be upfront about known issues: Transparency can prevent last-minute surprises. If you’re aware of any minor issues with the property, disclose them early to avoid renegotiations based on survey findings.
• Maintain consistent communication: Keep the lines of communication open with your estate agent and, through them, your buyer. Regular updates help maintain momentum and address any concerns promptly.
• Have all paperwork ready: Ensure your solicitor has all necessary documents (e.g., property information forms, energy performance certificate) prepared before you even list the property. This can significantly speed up the legal process.

What to do if you’ve been gazumped or gazundered

Dealing with gazumping or gazundering can be incredibly stressful, but it’s not the end of your property journey. Staying rational and protecting your interests is key.

For buyers who’ve been gazumped: First, ask the seller or agent if they would reconsider or allow you to match the competing offer. Then, you must decide whether increasing your offer is financially viable or if it’s simply not worth overpaying. Talk to your solicitor about any potential options you might have, and discuss strategies for future purchases, such as exploring exclusivity agreements.

For sellers who’ve been gazundered: Don’t rush into accepting a lower offer. Assess whether it’s a genuine concern (e.g., backed by a survey report) or simply a negotiation tactic. Ask for evidence to support their reduced offer. Be willing to re-list the property if necessary, weighing the cost of potential delays against accepting a significantly worse deal. Remember, these situations are painful but common, and you have options.

Stay informed and in control during your property journey

While gazumping and gazundering are unfortunate realities of the UK property market, understanding them puts you in a far stronger position. Being proactive, well-informed and prepared makes a real difference, whether you’re buying or selling. Even small steps, like ensuring faster paperwork or maintaining clearer communication, can significantly protect your deal and reduce stress. At The Personal Agent, we are here to guide you through every step, helping you navigate these challenges with confidence.

FAQs

What are the rules on gazumping? In England and Wales, gazumping is legal because a property sale is not legally binding until contracts are exchanged. This means a seller can accept a higher offer from another buyer even after verbally agreeing to sell to you.

At what point can you no longer be gazumped? You can no longer be gazumped once contracts for the property sale have been formally exchanged between the buyer and seller. At this point, the agreement becomes legally binding.

How to deal with gazundering? If you’re gazundered, assess the buyer’s reason for lowering their offer. Ask for evidence (e.g., survey report). You can choose to negotiate, accept the lower offer or refuse and re-list the property. Consult your estate agent and solicitor for strategic advice.

How do I protect myself from gazumping? To protect yourself from gazumping, move quickly with your legal and mortgage processes, ask the seller to take the property off the market, consider a lock-in agreement and explore gazumping insurance.