It's a word that is pretty unique in Australian real estate. To gazump means to accept a second offer after you've already accepted a first.
Is it illegal? Despite what many people think, the short answer is no. Immoral, well, that's another story altogether.
If you have ever been gazumped, there is a pretty good chance you will absolutely hate the agent that did it to you. You've put your heart and soul into finding the right property. After a long search, you've finally fallen in love with the right home, your piece of the great Australian dream. You've haggled with the agent and possibly even paid your deposit. You're thinking about all the changes you plan to make to your new abode, only to find out at the last minute that your home has been stolen right from under you.
The agent has SMSed to let you know someone else has moved faster. Or even offered to pay more than you have. Or some other pathetic reason. But it was yours! You had a deal! It can't be true! And to find out by text! What a scumbag.
Sadly this is an everyday occurrence across Australia. It's heartbreaking when it happens. A good agent will do their best to ensure this never happens. It is their job to explain the process (which can be daunting, especially if it's the first time you've done it). They should give you some guidelines for when you will need to exchange contracts. Without that, you are leaving yourself wide open.
Before accepting an offer, we like our purchaser to commit to a timeframe for when we can expect contracts to exchange. Typically we allow two business days. Whether the purchaser has a cooling-off period or not is agreed to by negotiation.
If it's a multiple offer situation, we ensure every buyer has plenty of time and space to make decisions. For someone that has missed out, we will let them know the price we are about to accept. Then triple-check they are out. We seek assurances from them that they won't change their minds and call us tomorrow with a new price. If they need more time to think, we will give them that.
For our owners, we think it is reasonable that once they are happy with an offer, they give buyers that 2-day window in which to exchange. We explain this to them and ensure everyone's expectations are in alignment.
This seems to work most of the time. But not always.
We have a property that we accepted an offer on 16 days ago. The buyer has paid a deposit but has not exchanged contracts. That means the deposit is 100% refundable. It means nothing. After he didn't exchange in the promised timeframes, I gave him a couple more days. Then a bit of a nudge to move quicker. We had provided a pest and building report upfront and offered him a 10 day cooling off period to allow him to do his due diligence, so there was no reason he couldn't exchange. Perhaps he didn't want to lose his 0.25% deposit if his finance fell over.
In any case, it has been a frustrating wait. The second highest offer was only $5000 less. My owner is now considering moving forward with this second buyer. Is that fair? Well, yes, I believe it is. I have given our purchaser plenty of time to sign the contract. I'm getting a stack of excuses and a lot of unreturned calls. Things are becoming unfair for my owner.
I want to do the right thing by our first buyer. But how long do we wait? Another week? A month?
The key message here is that agents shouldn't need to gazump buyers. It's a terrible practice that can cause major distress to someone. But, when buyers put an offer on the table, there is an expectation that they also deliver on their part of the bargain in a reasonable timeframe. (And, not all agents are going out of their way to screw people over).
