Gazumping

Gazumping is the term used to describe a situation in which the seller of an asset (let's say a house) accepts an purchase offer, having already accepted another lower offer from another potential buyer.

In other words, the seller changes his allegance to a second buyer who offers more money.

A buyer with ready cash will often be in a position to gazump somebody who has to raise capital through a mortgage. This is because under English law, the seller is not legally committed to go ahead with the sale until the point at which contracts are exchanged.

Gazumping tends to become a feature of property bull markets, where house prices are racing ahead and buyers begin to panic that they may find their potential dream home rising in value out of their "price range". Estate agents having put a buyer and seller together often discover a fresh potential buyer appears on the scene. The agent then has a judgement to make, does he advise his client, the seller to switch allegance to the new purchaser.

Estate agents are frequetly portrayed as bandits -sometimes justifiably - but bear in mind sellers who may have acted disreputably will often blame the intermediary - the "poor old" estate agent gets the blame!

Get professional help from a qualified independent mortgage advisor and see how much you could save on your mortgage payments. There's no obligation, just plain good advice.

See also: Financial Services, Mortgages