What is gazumping?

Gazumping occurs when a prospective buyer has made an informal, successful verbal or written offer to buy a property, only for their accepted offer to be one-upped by a different potential buyer making a counter-offer at a higher price for the property in question.

In most parts of Australia, sellers typically have no obligation to honour any informal written or verbal agreements they may have made with you regarding an offer you’ve submitted on their property.

This means that if someone else makes a better offer on the property, the seller can potentially disregard the informal agreement with the original buyer, in favour of selling for a higher purchase price, as long as contracts haven’t been signed yet.

It’s worth noting that gazumping can occur regardless of what type of home you’re looking to buy, and whether you’re looking for a home to live in, or looking to invest in a property to rent out.

In most parts of Australia, you could be gazumped. With the exception of Queensland and the Australian Capital Territory (ACT), which have legislated measures in the past to try and curb gazumping, there are few restrictions on the practice in Australia (as of January 2025).

While gazumping involves the seller pulling the rug out from under the buyer, gazundering is quite the opposite. A seller has been gazundered if they informally accepted an offer from a buyer, only for the buyer to withdraw their informally agreed upon offer at the last minute and submit a new, lower offer.

As with gazumping, gazundering is largely unregulated within Australia, with no state or territory having laws in place that prohibit or restrict the practice during a property sale (as of January 2025).

Having a conveyancer on hand and ready to act can be extremely valuable. This is because they’ll typically be the one who looks over any contracts or paperwork you’re sent by the seller, so the sooner they get to work, the sooner you can sign on the dotted line, and the less time other buyers have in which to try and gazump you.

Once you’ve had your offer accepted, you’ll typically want to arrange for building and pest inspections as soon as you can, regardless of whether your contract is subject to the results of those inspections or not. If there’s a structural or pest-related issue with the property, you’ll want to know about it sooner rather than later.

If all else fails, buying at auction could be a surefire way to avoid being gazumped. This is because the bidding war you’d usually see at a property auction is essentially a group of registered bidders openly ‘gazumping’ each other with higher and higher bids.

At auction, once no one else is willing to up the stakes further, whoever made the most recent (and highest) bid will win the auction (given the reserve has been met) and will typically be legally obligated to sign an unconditional contract immediately and on the spot. So, if you manage to place the highest bid in excess of the reserve, the property will be yours for all intents and purposes, with no need to fear being gazumped.

Remember to do your due diligence when it comes to buying a property at auction though! You generally won’t be able to back out once you’ve won, so be sure to have pest and building inspections done beforehand and see if you can ask for a copy of the pre-filled contract of sale for your solicitor or conveyancer to look over prior to the auction date.