Buying or selling a home is one of the biggest financial commitments most people will ever make. It is also a process that can be both exciting and stressful, particularly when unexpected problems arise. Among the issues that frequently concern buyers and sellers are gazumping and gazundering - two practices that can disrupt a property transaction and leave one or both parties feeling frustrated and out of pocket.

If you are buying or selling a property in Wales or elsewhere, it is important to understand exactly what these terms mean, whether they are legal, and what steps you can take to reduce the risk of them happening to you.

As experienced conveyancing solicitors based in Ebbw Vale, South Wales, we regularly advise clients throughout the conveyancing process. While no solicitor can completely eliminate the possibility of gazumping or gazundering, there are sensible legal and practical steps that can significantly reduce the chances of your property transaction falling through.

What is gazumping?

Gazumping occurs when a seller accepts a higher offer from another buyer after already accepting an earlier offer but before contracts have been exchanged.

For example, imagine you agree to purchase a house for £250,000. Your mortgage application is underway, your solicitor has begun the conveyancing process and surveys have been arranged. Before contracts are exchanged, another buyer offers £265,000. The seller decides to accept the higher offer, leaving you without the property despite the money and time you have already invested.

Unfortunately, this situation is entirely lawful in Wales and England.

Many buyers are surprised to learn that an accepted offer is not legally binding. Until contracts are formally exchanged, either party is generally free to withdraw from the transaction without legal penalty.

Although gazumping is often viewed as unethical, particularly after a buyer has incurred legal fees and survey costs, it is not illegal.

What is gazundering?

Gazundering is essentially the opposite of gazumping.

This occurs when a buyer reduces their offer shortly before contracts are exchanged, often when the seller feels under pressure to proceed.

Imagine you have agreed to sell your home for £320,000. Removal arrangements have been booked, your onward purchase is progressing smoothly and exchange is expected within days. Suddenly, the buyer reduces their offer to £305,000 and indicates they may walk away if you refuse.

Faced with the prospect of losing the entire chain, some sellers reluctantly accept the lower figure.

Like gazumping, gazundering is generally lawful because no binding contract exists until contracts have been exchanged.

Read: 5 Common mistakes to avoid when selling a property

Why are these practices legal?

Many clients ask why the law allows either situation to occur.

The answer lies in how conveyancing works in Wales and England.

Once an offer is accepted, the transaction enters the conveyancing stage. During this period, solicitors carry out property searches, investigate title documents, raise enquiries, review contracts and deal with mortgage requirements.

However, despite all this work taking place, neither party is legally committed until contracts are exchanged.

This differs from some other legal systems where an accepted offer creates legally enforceable obligations much earlier in the process.

The current system offers flexibility but also creates opportunities for gazumping and gazundering.

How common are gazumping and gazundering?

Fortunately, most residential property transactions proceed without either issue arising.

However, they are more likely to occur in certain market conditions.

Gazumping is generally more common when property demand is particularly strong and there are multiple interested buyers competing for the same property.

Gazundering tends to occur in slower markets where buyers believe sellers may feel pressured to complete quickly or where there have been unexpected changes in the property market during the transaction.

Economic uncertainty, fluctuating mortgage interest rates and falling house prices can also increase the likelihood of renegotiation.

Can a seller change their mind after accepting an offer?

Yes.

Until contracts have been exchanged, the seller can usually:

• Accept another offer.
• Withdraw from the sale altogether.
• Decide not to sell.
• Renegotiate the agreed price.

This can understandably be disappointing for buyers, particularly after spending money on surveys, searches and legal work.

For this reason, experienced conveyancing solicitors will often recommend progressing the transaction as efficiently as possible to minimise the period before exchange of contracts.

Can a buyer lower their offer before exchange?

Again, yes.

Buyers are entitled to renegotiate before contracts are exchanged.

Sometimes this happens for perfectly legitimate reasons.

For example, a survey may reveal previously unknown structural defects, damp problems or roof issues requiring expensive repairs. In these circumstances, renegotiating the purchase price may be entirely reasonable.

However, where a buyer simply waits until the final stages to demand a lower price without any genuine justification, this is generally regarded as gazundering.

Although lawful, it can place sellers in an extremely difficult position.

Read: How to avoid delays when buying or selling a property

How can buyers protect themselves from gazumping?

There is no guaranteed way to prevent gazumping, but several practical steps can reduce the risk considerably.

Choosing an experienced conveyancing solicitor at the outset can help keep the legal process moving efficiently and minimise unnecessary delays.

Being mortgage-ready is equally important. Buyers who already have a mortgage agreement in principle are often viewed more favourably by sellers because they appear better prepared.

Responding promptly to requests for documents or information also helps maintain momentum throughout the transaction.

Good communication between buyers, estate agents, mortgage lenders and solicitors can often prevent avoidable delays that might otherwise encourage a seller to consider alternative offers.

Finally, arranging surveys and searches as early as possible helps shorten the period before contracts can be exchanged.

How can sellers protect themselves from gazundering?

Sellers also have several ways to reduce the likelihood of last-minute price reductions.

Selecting buyers who appear financially organised and genuinely committed can make a significant difference.

If a buyer has already sold their own property, has finance arranged and instructs solicitors promptly, they are often less likely to attempt unnecessary renegotiation.

Maintaining realistic expectations regarding the property's value is also important. Pricing a property fairly from the beginning often attracts committed buyers rather than speculative purchasers.

Keeping the conveyancing process moving efficiently is another key factor. The longer a transaction remains outstanding, the greater the opportunity for circumstances to change.

What role does your conveyancing solicitor play?

While solicitors cannot prevent another party from changing their mind before exchange, they play an important role in reducing delays and helping transactions progress smoothly.

An experienced conveyancing solicitor will:

• Prepare legal documents promptly.
• Carry out searches without unnecessary delay.
• Raise enquiries efficiently.
• Keep you informed throughout the transaction.
• Liaise with estate agents and mortgage lenders.
• Identify issues early before they become major problems.
• Work proactively towards exchanging contracts as quickly as circumstances allow.

The sooner contracts are exchanged, the sooner both buyer and seller become legally committed.

What happens after contracts are exchanged?

Exchange of contracts is one of the most significant milestones in the conveyancing process.

Once contracts have been exchanged:

• The agreed purchase price becomes legally binding.
• Both parties are committed to completing the transaction.
• Neither party can usually withdraw without significant legal and financial consequences.
• A completion date is fixed.

This is why conveyancing solicitors place such emphasis on reaching exchange as efficiently as possible.

Are there any legal reforms planned?

Gazumping has been discussed by governments and industry bodies for many years.

Various proposals have been suggested to make property transactions more secure, including reservation agreements and earlier legally binding commitments.

While some pilot schemes have explored these ideas, the legal position in Wales and England remains largely unchanged at the time of writing.

Until contracts are exchanged, either party generally retains the freedom to withdraw or renegotiate.

Make informed decisions and reduce exposure to risk

Gazumping and gazundering can be frustrating experiences, particularly when considerable time, money and emotion have already been invested in a property transaction. Although both practices are lawful under the current conveyancing system in Wales and England, understanding how and why they occur allows buyers and sellers to make informed decisions and reduce their exposure to unnecessary risk.

The most effective way to protect yourself is to instruct experienced conveyancing solicitors as early as possible, remain organised throughout the transaction and ensure matters progress without avoidable delay. While no solicitor can guarantee that gazumping or gazundering will never occur, proactive legal advice and efficient case management can significantly improve the chances of reaching a successful exchange of contracts.

At Fonseca Law, our experienced team of conveyancing solicitors in Ebbw Vale help buyers and sellers across South Wales and beyond navigate every stage of the conveyancing process. Whether you are purchasing your first home, moving house or selling an investment property, we are committed to making your transaction as straightforward, efficient and stress-free as possible.