So what exactly is Gazumping?

Gazumping is an act of deliberate refusal or termination of a particular deal or agreement of sale at the very last minute of transaction. This aggravates the situation by doing an act just to accept a higher offer or bid from another buyer. Many people believed that the word Gazumping evolved from the Yiddish term “gazumph” which literally means “to swindle” or to impose extreme overcharging of merchandise. In the 1920s, many gangsters adopted this term as common word slang for their basic conversation.

Gazumping became a very common act during the real estate boom in the 1980s in the British market. This was mainly due to the fact that trade practices during those years are not formalized in a legally binding contract. Even if a buyer has offered a fair price to the seller of a property, each of the two parties has no obligation of transaction until a written version of the agreement has been considered. As a matter of fact, in order to prevent any serious forms of dishonesty in business transactions, no sale is valid unless a written and signed contract is available.

When a transaction is to be done, the buyer is not capable to do surveys of legal concerns regarding the sale of the product or property. In this case, the seller can easily pull out from a deal if a better offer comes from another third party individual. Unless there is an earlier version of written commitment, the previous buyer does not have any rights or obligations to proceed with the purchase. In some cases, it can take up to 12 weeks before a solid agreement may be initiated.

Although gazumping is very much dependent on the practices of the individuals involved, some external factors may also affect the severity of this act. When market prices dropped with regards to house properties, gazumping became almost rare. This is because of the fact that interested buyers may increase their purchase options by surveying the best valued property. On the other hand, properties owners have a tendency to force sell their units. It would be very disadvantage for them to wait for the highest bidder while the true worth of the real estate is declining.

Now days, gazumping may be considered to be very rare because of institutionalized sale agreements. Laws have been passed to protect the rights of a buyer when contracts have been annotated by both parties. If you are interested to acquire a real estate property, make sure that you will sign a formal transaction agreement to make your claim to be a valid one. This will prevent unfair trade practices that sometimes lead to the termination of the deal as well as legal trouble matters.