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Gazumping - More Than a Funny Word

You've found your dream home, had your offer accepted, and you're getting ready to sign the contract. Then bam! The seller accepts a higher offer from someone else. That’s gazumping, and while the word may sound comical, the consequences are serious. Here’s what NSW buyers need to know to avoid disappointment and legal frustration. 

What Is Gazumping? 

Gazumping happens when a seller verbally accepts an offer from a buyer but later sells the property to someone else, usually because they received a higher or better offer, before contracts are exchanged. 

In NSW, a property sale is not legally binding until both buyer and seller sign and exchange contracts. That means even if your offer has been accepted, the seller can still entertain other offers. 

Is Gazumping Legal in NSW? 

Unfortunately, yes. 

Until contracts are formally exchanged, a seller can: 

• Accept another offer 

• Increase the asking price 

• Decide not to sell at all 

It’s frustrating and can feel unethical but in NSW, it’s perfectly legal. The law protects buyers only after exchange of contracts has occurred. 

Why Does Gazumping Happen? 

Gazumping is more likely to occur in a hot or rising market, where buyer competition is fierce and properties are in high demand. But it can also happen due to: 

• Delays in finalising the contract 

• Slow finance approval 

• Buyer hesitation 

• An agent continuing to show the property 

What Can Buyers Lose? 

If you’re gazumped, you might lose more than just the house: 

• Building and pest inspection costs 

• Legal or conveyancing fees 

• Loan application or valuation costs 

• Time, energy, and emotional investment 

None of these expenses are typically recoverable, even though you were proceeding in good faith. 

How to Protect Yourself from Being Gazumped 

While there’s no 100% guarantee, there are steps you can take to reduce the risk: 

1. Be Ready to Exchange Quickly

Have your finance pre-approved, inspections completed, and solicitor or conveyancer ready to go. The faster you can exchange, the less window there is for gazumping. 

2. Request the Property Be Taken Off the Market

Ask the agent or seller to take the property off the market once your offer is accepted. While not enforceable, it shows intent and discourages other offers. 

3. Use a Cooling-Off Exchange

In NSW, you can exchange contracts with a 5-day cooling-off period. This legally binds the seller, and you can withdraw if needed (with a small penalty). It’s a fast way to secure the property early. 

4. Act Fast with a Section 66W Certificate

This certificate, signed by your solicitor or conveyancer, waives the cooling-off period and results in an immediate, unconditional exchange. Be cautious; only use this when you're 100% ready. 

5. Work with an Experienced Conveyancer

A proactive legal team like ClickLaw can help you move quickly, review contracts, and negotiate terms to minimise risk. 

Final Word: Gazumping Is Legal, But Avoidable 

Gazumping can feel like a betrayal but with the right legal support and preparation, you can reduce your risk and secure the property you’ve worked so hard to find. 

Don’t let gazumping ruin your property plans. Speak to ClickLaw’s experienced property lawyers today and move confidently from offer to ownership, with no nasty surprises in between.