GAZUMPING

A term that describes the withdrawal of either party from a land sale before exchange. It is the nature of real estate conveyancing that there is no binding contract until exchange and therefore, it is almost impossible to stop gazumping.

A typical and reasonably common gazumping practice is when the agent allows two or more buyers to enter into a new but higher agreement with the vendor. The agent then tells the original intending buyers that the price has gone up. They are then left to outbid new intending buyers in a similar manner to an auction. In a falling market, the opposite can occur; the seller is gazumped by a buyer.

There are controls in a number of states but in not NSW.