River City Blog

“You’ve been Gazumped!” Sounds like a battle cry from a 1970’s Milton Bradley game. But actually it is a familiar term to many real estate buyers, in England. Here in the good old US of A, buyers and sellers enter into a legally binding agreement to buy and sell real property. The purchase agreement may have contingencies that allow one party or the other to terminate the agreement if certain conditions are not met or satisfied. But neither party can simply “back out” without a specific provision in the agreement allowing such. Not so in merry ole’ England. Buyers and sellers agree verbally to a purchase and sale. Then their respective solicitors prepare contracts to be “exchanged” at the consummation of the sale. At any time prior to the exchange of contracts, the seller may accept a better offer from a different buyer, regardless of the expense and trouble the first buyer may have encountered. Gazumping is a phenomenon that occurs regularly during a “seller’s market”. Its’ opposite is Gazundering, and yes you’ve guessed it, a buyer, right before the exchange of contracts decides to lower his offer. During a “buyer’s market” this practice is fairly common.

I did get my inspiration for a career in real estate while living in England. However, having experienced many stressful transactions and closings here in southern Indiana, I would not want to be the one to tell the seller, who is packed and moved, “Guess what? The buyer is retracting his offer and is now only willing to pay…” Or to break the news, “The seller has decided to sell to someone else” to the family parked in a U-Haul outside what was to be their new home.