How Do Property Markets Work Elsewhere In The World, To Minimise Gazumping And Gazundering?

Keep in mind that no property deal will ever be immune to the risk of last minute drops in the offered price (gazundering) or last minute offers from rivals (gazumping). All that the market regulation can try to do is to provide disincentives to both buyers and sellers to back out of a deal.

The most common mechanism is an early contract, usually written and signed within a week of a deal being verbally agreed. This contract will lay out the commitment to buy and sell, the grounds upon which each either party can back out without penalty, and the penalties if the parties renege for any reason other than those grounds.

Typically the grounds to back out are related to problems with the property, its situation, or planned developments in the area (such as a new factory going up next door). Failure of the other party to fullfill terms of the contract may also be legitimate grounds for backing out.

Often after the property passes each new survey or hurdle (such as loan approval) a new set of contracts will be produced and signed by both parties, each time increasing the penalties for failing to sell and restricting the criteria upon which either party can renege without penalty.

The penalties for not buying/selling or usually financial, and may involve forfeiting part of the deposit and reimbursing the other party for costs.

In some places (like Scotland) an initial contract may be considered in force as soon as a verbal agreement to buy/sell is made.

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