Friday 29th April 2022 from 9am

Wills & Estates Senior Associate Debbie Sage will join Robyn Hyland to talk about the importance of planning for end-of-life care and what options are available.

Gazumping (or Something Like That)


Gazumping occurs when you have a verbal agreement with an agent or seller to buy a property at an agreed price but at the end the property is not sold to you. Property and Commercial Partner Barry van Heerden discusses the meaning of Gazumping and tips to avoid being Gazumped.

So, you have found your dream home and the negotiations to buy were long and stressful but at the end successful.  The agent confirmed the seller has accepted your latest offer and it is now only a matter of signing Contracts.  The agent advised the Contracts will be ready in no longer than 5 days.

You start immediately with arranging everything for the big move.  The children and even the dog are quite excited about the big move and can’t wait for the day you move into your dream home.
On the 5th day you called the agent to arrange for the signing of the Contracts just to be informed by the agent you were gazumped.

You had no clue what that means but it appears your dream home is gone and there will be no big move.  You called your lawyer and he explained the following to you:

  •  In NSW a property sale is generally only binding on the seller and the buyer when Contracts are exchanged between the two parties.  Exchange occurs when the seller signs its copy of the Sale Contract, the buyer signs its copy and the two parties exchange their signed Contracts.
  • Gazumping occurs when you have a verbal agreement with an agent or seller to buy a property at an agreed price but at the end the property is not sold to you.  This usually happens when the seller has decided to sell the property to someone else, usually for a higher amount.  The agent who is acting for the seller is obliged to pass on to the seller all offers received for the property up to the date of exchange of Contracts.

It is apparent from the above that with home sales there are 3 groups of people involved:-

  • Sellers
  • Buyers
  • Agents

The sellers want the highest price, the buyers want the lowest price and the agents want their commission. For buyers and sellers this may be a dangerous formula.

If you are selling a home it is natural to want to sell to the buyer who offers you the highest price.  But what if you verbally agree to accept a price from one buyer and then the agent submits a higher offer from a second buyer?  It is easy to say morally you should honour your word.  In practice it is not that easy.  It is a difficult ethical dilemma but sellers operate in the real commercial world and in most cases will most probably accept a higher offer.

You were quite shocked with the advice from your lawyer and asked him what you can do to protect yourself in future from something similar happening.

Your lawyer provides you with the following tips:-

  • Seek to exchange Contracts with the seller as soon as possible.  On exchange you must be able to pay the deposit and therefore you must be ready to apply pressure on the agent to arrange exchange as soon as possible.
  • Be aware that the seller is not generally compelled to sell to any specific person and can change their mind at any time prior to the exchange of Contracts.  Sellers may not necessarily sell to the person that makes the higher offer but may accept a lower offer from a perspective purchaser.  We were involved in a case recently where a retired dentist sold his home to a young couple despite the fact there was someone else prepared to pay more.  The reason was the young couple wrote him a letter telling him how much they loved his home and how they wanted to raise their family in his home.  Because of this personal connection the seller was prepared to sell the property at a lower price to the young couple.
  • Negotiate firmly with the seller or its agent. Ask the agent to let you know of any other offers but be aware there is no obligation on the agent to provide you with that information.
  • Understand that the lower the price you offer the higher the risk that another buyer will offer more and you will get gazumped.  Consider whether you want to take the risk of losing the house by offering less than you are willing to pay.  Sometimes it is better to just make your highest offer and then if that is not accepted to walk away.  It is tragic to lose your home you love because you bluffed too hard.

You now understand what gazumped means and even though you have learned something in the process you are not overly happy with the outcome. You will now have to explain to the kids and the dog that there is no big move coming.

Should you require any assistance or lawyers who can act speedily to protect you as far as possible from getting gazumped please do not hesitate to contact our property and commercial department.

You are welcome to contact our office with any enquiries concerning property and commercial advice. Please contact our Property and Commercial Department Manager, Jess Kimpton on direct line 07 5506 8214, email

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Barry Van Heerden - Special Counsel - Property & Commercial

Barry van Heerden

Special Counsel
Property & Commercial

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The contents of this article are considered accurate as at the date of publication. The information contained in this article does not constitute legal advice and is of a general nature only. Readers should seek legal advice about their specific circumstances. 

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