Gazumping

A slang term to describe the practice of reneging on an oral commitment to buy or sell a property because a better offer or opportunity was presented after the oral commitment was made but before a legal sales contract was consummated. Example: Gazumping can be a big problem in areas where a formal sales contract is signed only after the buyer has thoroughly investigated the property. The buyer may have invested much time and money in the due diligence process, yet lose out if the seller gets a better offer It can also work in reverse. The buyer may renege after the seller has held the property off the market. The seller may valuable exposure time during the peak marketing season.