'Gazumping' is the term used to refer to when a house seller accepts an offer from one potential buyer, but then accepts a higher offer from someone else. The first buyer is left in the lurch, and either has to offer a higher price or accept that they have lost that home and continue looking.

This practice tends to occur in a market when house prices are rising as there are more buyers around than sellers. The problem in much of the UK, for example, is that until contracts have been exchanged the sale agreement is not legally binding.

Once an offer has been accepted, either the buyer or the seller can pull out at any time until the exchange of contracts. Unfortunately agents are legally obliged to inform sellers of all offers made on their property, even after one offer has been accepted.

But during this period between the acceptance of the offer and exchange, the buyer spends a considerable amount of money on surveys, solicitor's fees, and confirmation of the mortgage offer. There is very little you can do to repel a determined bidder.

With the ever-rising cost of housing in the late 1980s and early 1990s, gazumping became commonplace in England and Wales because a buyer’s offer is not legally binding even after acceptance of the offer by the vendor.

The Scottish system of ‘conveyancing’ has effectively eradicated most cases of gazumping. In Scotland a seller must provide written acceptance of a successful bid. When property prices are in decline the practice of gazumping becomes rare.

The term gazundering has been coined for the opposite practice whereby the buyer waits until everybody is poised to exchange contracts before lowering the offer on the property. In France gazumping cannot occur since it is not allowed.

When the seller and the buyer have agreed on a reasonable price they sign a reservation agreement at the notaire or real estate agent’s office. This will be in the form of an agreement to purchase (compromis de vente). This is a binding agreement and the seller is not allowed to accept a better offer.

As soon as the reservation agreement is signed, the property is automatically taken off the market even if the buyer does not ask the notaire/ real estate agent to do so. As soon as the reservation agreement is signed, the final deed of sale will be prepared.

The notaire may ask the buyer for certain documents and he will make various checks with the administrative authorities, which usually take several weeks. Later the final deed of sale (acte de vente) is signed and the sale is complete.