What is gazumping?

What is gazumping?

• A. An accepted offer is superseded by a higher offer from another buyer before contracts are exchanged.
• B. The seller reneges after accepting an offer and pulls out.
• C. The buyer changes their mind after exchange, cancelling the sale.
• D. The property is sold to a family member at a later date.

Answer: (A)

Gazumping happens during the window between when an offer is accepted and before contracts are exchanged. In that period, the seller can accept a higher offer from another buyer, which means the original accepted offer is superseded and the seller switches to the higher bid. This is why the description “an accepted offer is superseded by a higher offer from another buyer before contracts are exchanged” best captures gazumping. The other scenarios describe different issues: the seller backing out after accepting is a seller reneging on the deal; the buyer pulling out after exchange is a different breach once a binding contract exists; and selling to a family member later doesn’t define gazumping and isn’t part of the pre-exchange risk.

Gazumping happens during the window between when an offer is accepted and before contracts are exchanged. In that period, the seller can accept a higher offer from another buyer, which means the original accepted offer is superseded and the seller switches to the higher bid. This is why the description “an accepted offer is superseded by a higher offer from another buyer before contracts are exchanged” best captures gazumping.

The other scenarios describe different issues: the seller backing out after accepting is a seller reneging on the deal; the buyer pulling out after exchange is a different breach once a binding contract exists; and selling to a family member later doesn’t define gazumping and isn’t part of the pre-exchange risk.