What is Gazumping?
In essence, gazumping occurs when a property seller accepts an offer from one buyer and then indicates that they want to accept a higher, or better, offer from another buyer. This can often happen quite far into the transaction, when the original buyer is well into the legal process of buying the house. This, of course, leaves the original buyer in a difficult and frustrated position where they would either have to increase their original offer or risk losing out on the property that thought they had agreed to buy.
Does Gazumping Happen in Scotland?
Gazumping is less common in Scotland than it is in England and Wales. A large proportion of properties in Scotland are sold by solicitor estate agents, bound by Law Society of Scotland rules that are designed to prevent gazumping.
These Law Society of Scotland rules dictate that, where a solicitor has accepted an offer on behalf of their client, they cannot accept another offer from a different party and they must withdraw from acting for their client if the client wishes to negotiate with that new, potential buyer. Of course, nothing stops the seller from switching solicitors in this scenario.
However, non-solicitor estate agents are not bound by these rules. In theory, therefore, gazumping is not much less likely to happen where the property is marketed for sale by a non-solicitor estate agent in Scotland than it is in England and Wales.
What is Gazundering?
In short, gazundering is when a buyer, having already had an offer accepted on a property, lowers their offer. This can leave the seller, depending on their individual circumstances, either having to accept this new, lower offer or having to begin the selling process all over again. If that seller has agreed to purchase a property following the agreement of their sale, this can cause them to have to withdraw from their purchase.
Does Gazundering Happen in Scotland?
Similar to gazumping, gazundering is less common in Scotland because of Law Society of Scotland rules that govern the activities of solicitors acting on behalf of property buyers. Where a buyer’s solicitor has agreed to purchase a property on behalf of their client, the rules prevent them from lowering their original offer with only very limited exceptions. If their client insists on proceeding with gazundering, the solicitor is obliged to withdraw from acting for that client. As with gazumping, however, nothing stops the property buyer who wishes to lower their offer from from finding a new solicitor.