In either case, the original buyer is left in a bad situation, and either has to offer a higher price or lose the purchase.
This requirement was originally intended to promote good faith and certainty in land transactions and to prevent dishonesty.
It can take as long as 10–12 weeks for formalities to be completed, and if the seller is tempted by a higher offer during this period, it leaves the buyer disappointed and out-of-pocket.
'Gazanging' describes a similar situation, wherein a seller pulls out of a sale entirely, expecting to get a better asking price or offer once the market improves.
In Scotland, however, an estate agent, acting on behalf of the seller, can initiate instances of another form of gazumping.
Once a closing date for written offers has been reached and an estate agent has given an oral acceptance of the chosen bid, the estate agent can then attempt to induce a bidding war between the successful buyer and a rival, who may be fictional, in an attempt to increase the offer made by each party.
Such situations only occur at an early stage of the conveyancing process, prior to any written acceptance of an offer being given by the seller's solicitor.
The term gazumping is not used in the United States as once a house sale and price are agreed verbally it is binding in law.