What Is Gazumping in Queensland Real Estate? Definition and Agent Guide

Gazumping occurs when a seller accepts a higher offer from a new buyer after already reaching a verbal agreement with an earlier buyer — leaving that first buyer without a property and, often, out of pocket. In Queensland, gazumping is legal right up until a written contract is signed by both parties. Once both signatures are on the REIQ-standard contract and a fully executed copy has been delivered, the agreement is binding and gazumping is no longer possible. That single fact defines how Queensland’s sales process is structured, and it shapes almost every conversation an agent has between first offer and exchange.

How Gazumping Works in Queensland Real Estate

Gazumping is the situation where a seller, despite having a verbal agreement with one buyer, concludes a contract with another while the first is finalising finance and performing other necessary tests or inspections. The mechanism is straightforward: buyer A makes an offer, the seller’s agent verbally communicates acceptance, and the parties begin working towards a written contract. Before that contract is signed, buyer B appears with a higher figure. The agent — acting in the seller’s interest — presents that offer to the seller, who accepts it. Buyer A has no legal recourse.

When a buyer makes an offer to buy a property in Queensland, they sign a contract which is then passed on to the seller who is able to accept or reject the offer. Should the seller choose to accept the offer, the contract is signed and a binding agreement is formed once it has been delivered to the buyer’s solicitor. This is the critical distinction from how other Australian states operate. The key difference between Queensland’s approach to the formation of a contract and New South Wales’s approach is the point at which a binding contract is formed. In NSW, the process involves two copies of the contract being signed separately and then physically exchanged — a step that can take days or weeks. Even when the seller has given the buyer verbal assurance of a contract, there is no binding agreement for the buyer to rely on while seeking finance and completing the searches. This results in a window of opportunity for the seller, should they receive a higher offer or change their mind, to contract with another party.

Queensland compresses that window significantly. When a potential buyer in Queensland makes a written offer to a seller’s agent, and that seller is happy with the offer, the seller’s agent provides the buyer with a contract of sale to sign. Once both the buyer and the seller have signed the contract and hold fully-signed copies, the property is considered sold under the legally binding contract. This reduces the amount of time between when an offer is made and when the contract of sale is signed. The gazumping window in Queensland is therefore measured in hours or days, not weeks — but it still exists, and agents must understand it precisely.

In Queensland, the offer is usually made on the actual contract; once both parties sign — often subject to conditions — it’s binding, which compresses the gazump window, but a buyer is still exposed until signatures land. That exposure period matters. A seller who has verbally agreed but not yet signed is, legally, still free to walk. So is a buyer. No verbal commitment, no email, no handshake creates a binding obligation in a Queensland residential property transaction.

Why Gazumping Matters for Queensland Agents

The practical rarity of gazumping in Queensland does not diminish its relevance for licensed agents. Instances of gazumping are generally accepted to be almost non-existent in Queensland when compared to other states in Australia. But “almost non-existent” is not zero, and in a market driven by tight supply and multiple competing buyers, the pre-contract window becomes a live risk agents must actively manage — both for their client and for their own professional standing.

Real estate agents are legally obligated to act in the seller’s best interest, and consequently, they aim to secure the highest possible price — even after a verbal agreement has been reached. This duty is the engine of gazumping. Real estate agents must promptly communicate all offers from prospective buyers to sellers, a requirement in every Australian state and territory, as the agent is working on behalf of the seller and is required to act in their best interest. An agent who withholds a higher offer from the seller — even to protect a buyer they feel sympathy towards — is in breach of their duty and potentially in breach of the Property Occupations Act 2014 (Qld) (POA).

The flip side is equally consequential. Real estate agents are legally required not to mislead or deceive any parties during business activities. If an agent falsely claims there is another offer, this would be considered misleading and deceptive conduct and a violation of the law. Under section 212 of the Property Occupations Act 2014 (Qld), a licensee or real estate salesperson must not represent to another person anything that is false and misleading relating to the letting, exchange or sale of real property. The maximum penalty for a breach of section 212 is significant: the maximum penalty for breaching the section is $72,063 (540 penalty units).

Gazumping also creates reputational risk. A buyer who believes they were told “it’s yours” — only to have the property sold to someone else — will rarely distinguish between the seller’s right to change their mind and the agent’s role in the process. Managing expectations clearly and early is not just good practice; it is essential risk mitigation for any Queensland agent working in a competitive market.

The Legal Framework: Contract Formation, Agent Obligations, and the POA

When Does a Binding Contract Form?

After both the buyer and the seller have signed the conveyancing contract, it becomes a legally binding agreement. In Queensland residential property transactions, this typically means the REIQ-standard contract (or a specially drafted contract) is signed by both parties and a copy of the fully executed document is delivered. Prior to that point — regardless of any verbal acceptance, email chain, or informal exchange — no binding obligation exists on either party.

Until the contract of sale is officially signed and exchanged, the seller retains the legal right to sell the property to a higher bidder. This is not a loophole or an ambiguity. It is the foundational rule of Queensland contract law as it applies to real property. The seller is equally free to walk away without penalty before signing, as is the buyer.

The Cooling-Off Period and Its Limits

Once a binding contract is formed in a standard Queensland residential sale, the cooling-off period lasts five business days from the day the buyer receives the signed contract. Unlike the buyer, the seller does not have a cooling-off period to reconsider. This asymmetry is deliberate: the legislation provides some post-contract protection to buyers, while sellers are locked in from the moment they sign.

If the buyer cancels the contract during the cooling-off period in Queensland, the seller can retain a penalty of 0.25% of the purchase price from the deposit and must return the remaining deposit amount to the buyer. Importantly, the cooling-off provisions of the POA do not apply to a contract formed on a sale by auction — directly on the fall of the hammer or directly at the end of another similar type of competition for purchase. Buying a property at auction removes the possibility of gazumping entirely. The highest bidder secures the property immediately, and the sale becomes legally binding.

The Agent’s Obligation to Present Offers — and Its Boundaries

Because agents are bound by law to present all offers until contracts are signed, buyers remain exposed to this risk. This is not discretionary. An agent who agrees with their seller not to accept further offers once a verbal agreement is reached is operating outside their legal obligations and their fiduciary duty. Sellers can give instructions — for example, a seller might provide the agent specific instructions on the offers they will consider, such as telling the agent not to offer them below a particular price — but a seller cannot lawfully instruct an agent to conceal a legitimate higher offer.

Real estate agents are bound by specific conduct standards set out in the Property Occupations Act 2014, with their primary duty being to their clients — the sellers. However, agents also owe certain obligations to buyers and must avoid misleading or deceptive conduct. This dual obligation is where agents most commonly create risk for themselves. Telling a buyer “the property is yours, don’t worry” — even informally — can expose an agent to a claim if the seller subsequently accepts a higher offer and the buyer has incurred costs as a result.

What a Seller Cannot Do Once the Contract Is Signed

Once a binding contract exists, the seller’s position changes dramatically. If the seller chooses to withdraw from the sale after contracts are signed, they could incur significant penalties, including the agent’s lost commission, marketing costs, and legal fees for work performed by their conveyancer.

A modern variation of gazumping relevant to Queensland is the off-the-plan scenario. There has been a dramatic increase in sellers trying to pull out of signed contracts, or demanding a price increase in order to proceed with their sales. This is arising in off-the-plan sale contracts, where developers are complaining that increased costs entitle them to increase the sale price of the apartment. Previously, a property developer could unilaterally decide to terminate a sales contract, but new laws now limit when developers can end a contract. The Property Law Act 2023 (Qld) reforms — which took effect from 1 August 2025 — introduced additional protections for off-the-plan buyers, restricting how and when sunset clauses can be invoked by sellers seeking to re-list at higher prices.

What Queensland Agents Need to Know About Gazumping

The Dual Duty Problem

Every Queensland agent working between verbal acceptance and contract execution is operating in a zone of competing obligations. The seller must receive all genuine offers. The buyer must not be misled. These two duties can collide — particularly when a buyer has spent money on inspections or finance approval in the pre-contract period, believing a sale is imminent.

Gazumping is generally viewed as unethical due to the potential financial loss and emotional distress it can cause the initial buyer, who may have invested time and money in property inspections, legal advice, and more. Ethically, this matters. Practically, it means agents should be explicit with buyers from the outset about what verbal acceptance does and does not mean. A clear, early conversation — “nothing is binding until both parties have signed the contract” — protects the agent as much as it protects the buyer.

Offer Shopping: The Line Agents Must Not Cross

There is a meaningful difference between an agent’s legal obligation to present a genuine higher offer and deliberately using one buyer’s offer to generate competing bids. Offer shopping is when an agent uses an existing offer to attract higher bids, creating a competitive bidding war. Whether this practice constitutes a breach of the POA or the Australian Consumer Law will depend on the circumstances and the representations made to each buyer about the status of competing offers.

Under section 212(3) of the POA, a representation is taken to be false or misleading if it would reasonably tend to lead to a belief in the existence of a state of affairs that does not in fact exist. If a person makes a representation relating to a matter that they do not have reasonable grounds to make, the representation is taken to be misleading according to section 212(4) of the POA. An agent who tells buyer B “there is another offer on the table” when no such offer exists — in order to pressure a higher bid — is squarely within the territory of section 212, and potentially section 18 of the Australian Consumer Law as well. A breach of Australian Consumer Law can be punished by a penalty for an individual of up to $500,000.00 per offence.

Advising Buyers Who Are Concerned About Being Gazumped

Buyers who raise the subject of gazumping with their agent deserve a straight answer. If a buyer is told there is another offer, they can ask the agent for proof, but the agent is not obligated to provide this evidence. The agent must also respect the privacy and confidentiality of the other party involved.

Agents can help buyers understand the practical steps that reduce their exposure. Moving to a signed contract as quickly as possible — ideally with pre-approved finance and inspections already complete — narrows the window during which gazumping can occur. Expenses such as legal advice, building inspections, or finance application costs are typically not recoverable if the sale falls through before a contract is signed. Buyers should understand this risk before they commit those funds.

For buyers seeking maximum certainty, purchasing at auction removes the possibility of gazumping entirely, as the highest bidder secures the property immediately and the sale becomes legally binding. However, auctions come with risks such as the absence of a cooling-off period and the potential loss of the deposit if the buyer withdraws.

Interstate Buyers and Investors: Setting Expectations Correctly

Queensland’s contract formation process is materially different from what buyers familiar with New South Wales or Victoria will expect. In other states and territories, the period after an offer is made can drag on as the buyer finalises their finance before signing the contract of sale, allowing time for another buyer to come in with a higher price. Interstate investors and first-time Queensland buyers will often assume the risks they faced in another jurisdiction apply here. They do not — at least not to the same degree.

Agents working with interstate or overseas clients should make this distinction explicit during the buying process. The Queensland contract operates differently, the cooling-off protections are different, and the concept of “exchange” works differently.

What This Means for Queensland Agents

Gazumping in Queensland real estate is not the chronic problem it represents in NSW or Victoria, but it is not irrelevant either. The window between verbal acceptance and a fully executed contract is real, and it carries legal and ethical consequences for every agent who operates within it.

The agent’s primary obligation to the seller — to present all genuine offers until contracts are signed — is non-negotiable and must be followed even when it is uncomfortable. At the same time, agents must be scrupulously careful about the representations they make to buyers during the pre-contract period. Telling a buyer they have secured the property, fabricating competing offers to drive a higher price, or failing to disclose relevant information each carry potential liability under the POA and the Australian Consumer Law.

Practically, the best protection for all parties is speed and transparency. Move to a signed contract as quickly as the parties will allow. Use plain language with buyers about what verbal acceptance means — and does not mean. And ensure that every offer received before exchange is communicated to the seller promptly and accurately. That discipline keeps agents on the right side of their obligations, regardless of which direction the negotiation moves.

The gazumping scenario also underscores why contract preparation matters. An agent who allows days to pass between verbal acceptance and contract execution creates risk for the buyer, risk for the seller, and professional risk for themselves. In Queensland, the process is designed to move quickly to a binding agreement — and keeping that process moving is one of the most practical things a licensed agent can do.