What is Gazumping?
Gazumping is when you have a verbal agreement with an Agent or Seller to buy a property at an agreed price but the property is not sold to you in the end.
This usually happens when the Seller has decided to sell the property to someone else, usually for a higher amount.
Gazumping is not a common occurrence, however, it does happen and it can be very disappointing if it happens to you, especially if it could have been avoided.
When is an Agreement for the Sale of Land Binding?
Agreements in relation to land are not binding unless they are in writing (see Step 11 – Exchange of Contracts of ‘The Ultimate Conveyancing Guide‘). If you are gazumped, neither the Agent nor the Seller is liable to compensate you for any money you may have spent on legal advice, inspection reports, finance application costs or searches and enquiries.
Gazumping is more likely to occur when the Agent has indicated that the Seller needs to sell the property quickly, for whatever reason, and is predominantly concerned with making a binding Contract with a Buyer (that is, Contracts being unconditionally exchanged) than getting the highest possible price.
If you have negotiated a price on a property where these circumstances exist you should contact one of our Property Lawyers immediately and explain the circumstances to them and your concern that you may be gazumped.
Avoiding Being Gazumped
If you are concerned about being gazumped you should speak to one of our Property Lawyers and/or read the chapter ‘Don’t Get Caught Out‘ in The Ultimate Conveyancing Guide.
The Ultimate Conveyancing Guide
The Ultimate Conveyancing Guide is a comprehensive step-by-step guide to buying residential property in New South Wales.
The aim of this Guide is to assist buyers to more fully prepare themselves to buy residential property and understand the legal issues and procedures involved. Read more…