What is gazumping in Australian property?
Gazumping occurs when a vendor agrees verbally (or in writing) to sell a property to one purchaser, then accepts a higher offer from another purchaser before contracts are exchanged. In Australia, gazumping is generally legal because a property sale is not binding until contracts are exchanged (or in Queensland, until the REIQ contract is signed by both parties). The practice is widely considered unethical, but the legal protections against it are limited and vary by state.
Legal position by state
In NSW and Victoria, a property sale is not binding until exchange of contracts. Verbal agreements and even signed but unexchanged contracts are not enforceable. In Queensland, the REIQ contract is binding once signed by both parties (no separate exchange step), which provides slightly more protection. In all states, once contracts are validly exchanged, gazumping is no longer possible — the contract is binding.
How to protect against gazumping
Exchange contracts as quickly as possible. In NSW, a section 66W certificate waiving cooling-off can make the exchange more attractive to the vendor. In Victoria, requesting a 24–48 hour exclusive negotiation window can help. Having finance pre-approved, legal review completed, and the deposit ready shortens the time between offer acceptance and exchange.
How I help prevent gazumping delays
The main vulnerability period is between verbal agreement and exchange. I reduce this gap by reviewing contracts quickly — typically in minutes rather than the 1–2 days a manual review takes. For Sydney and Melbourne property lawyers, this faster turnaround helps clients exchange before a competing offer materialises.
Common issues
- A verbal agreement to sell is not legally binding in any Australian state — only exchanged contracts are
- Auction sales are gazumping-proof because the contract is exchanged on the fall of the hammer
- Queensland's signed-contract approach (no separate exchange) offers slightly more protection than NSW or VIC
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