Gazumping is a horrid and rather immoral process that can happen right at the last minute just as you think you have made a purchase of a property. (Gazumped is the past tense version of this.)
Take the following example:

You see a house and put in a bid for £250,000. Your offer is accepted and the relevant papers are drawn up in preparation for the final sign over. At the last moment someone else puts in a higher bid and for you the sale falls through. This can be a pain not only for you as it is costly in time and solicitor's fees but also if you are in a 'chain' (where people are waiting to buy your property who have people wanting to buy theirs and so on and so forth) it can have a domino effect of failed sales.

In Scotland they do not have the same problem as in England and it has often been suggested that we should take up the same method as it does have some clear advantages. The seller accepts an unqualified written offer on a property which is legally binding. Should the seller then attempt to accept a higher bid before the contracts have been legally finalised by a written offer and acceptance then their solicitor will refuse to act for them as this would be professional misconduct.

Normally a house in Scotland is offered on a 'fixed price' or 'offers over' basis. If the house for sale is on a fixed price basis, then the seller will usually accept the first offer made at the asking price. An "offers over" sale requires house buyers in Scotland to make an offer to buy the house at or above the offers only figure. If the seller expects to get several offers, a closing date will probably be set.

Hope that helps - hope it hasn't happened to you!

 It's a British term. It's when an offer is accepted to purchase a house, and then (with no warning) seller decides to sell to someone else for a higher price.

That doesn't sound so unfair, but the point is the person making the first offer will think it's all sorted, only to find out that they've been outbid.

The term really only applies in England and Wales, as the house market tends to have different dynamics in Scotland and Northern Ireland. In England, where house prices have been historically very volatile, gazumping happened quite often in the late 1980s, as house prices were soaring. In the time that it took for surveys to verify the value and problems of the property, the seller might get another higher offer and feel they couldn't refuse.

Nowadays English estate agents are supposed to follow a code of conduct which will minimise the risk of gazumping. This includes removing all advertisements for a property as soon as an offer has been accepted in principle.

Originally "gazump" was just a term for "cheat" (used since the 1920s).

Read about the related gazundering, and how gazumping is minimised elsewhere in the world.