Gazumping is what happens when a seller accepts an offer, but backs out of the deal after receiving a higher offer. More commonly seen in informal and verbal agreements to purchase non-commodity assets, gazumping is a frowned-upon but not necessarily illegal occurance. The first buyer, whose offer is initially accepted but is later rejected in favor of a higher offer, is said to have been "gazumped."
In some places of the world, acceptance of an offer is not legally binding until it is put in writing. The non-binding status of a verbal offer allows the seller to solicit higher offers up to the time a contract is signed or a written bill of sale (BoS) is issued. When the market is bullish and demand is on the rise, gazumping can lead to bidding wars. In real estate, gazumping can be especially frustrating -- not only because of the personal anxiety it creates for the buyer, but also because the buyer may have spent money on surveys and inspections, only to lose the deal.
In gazundering, a similar term, the buyer retracts a verbal offer at some point and then submits a lower purchase price. Gazundering is more likely to occur in faltering bear markets when the economy declines and there is a drop in wholesale prices. Should a seller refuse an offer and wait in hopes of getting a better one, he is said to be gazanging. The terms gazumping, gazundering and gazanging are more commonly used in market segments where offers are often made and accepted verbally, at least initially. They are also used to describe unacceptable practices for website auctions.