The verb "to gazump" came to prominence in the 1980s when rapid house price inflation brought the temptation for sellers to ditch agreements at the last minute and accept higher offers. At times gazumping became woefully commonplace in England and Wales where, under English law, a buyer's offer is not legally binding even after acceptance of the sale agreement by the vendor. When the owner accepts the offer on a property, the buyer has to spend money on a survey and on their solicitor's conveyancing work, but until contracts are exchanged either party can pull out at any time. Buyers have to wait on average 10-12 weeks to get the deeds to the property, and if the seller is tempted by a higher offer during this period it leaves the buyer disappointed and out of pocket.
The word is thought to have come from the Yiddish word gazumph meaning to swindle or overcharge, which became gangster slang in the 1920s. The term Gazundering has been coined for the opposite practice when house prices are falling and the buyer waits until everybody is poised to exchange contracts before lowering the offer on the property, threatening the collapse of a whole chain of house sales waiting for the deal to go through.
Scots law and practice makes the problem of gazumping a rarity in Scotland as agreement on an offer for property purchase is legally binding. This results in a system of conveyancing where buyers get their survey done before making a bid to the seller's solicitor. Sellers normally set a closing date for offers, then provide written acceptance of the best bid. Should they then attempt to accept a higher bid they risk legal action and their solicitor will refuse to act for them as this would be professional misconduct. Gazundering is possible where the buyer has insufficient assets to be worth suing, but is not common.
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