It’s not easy to formulate a definition that matches the brevity of this useful little word. It means to unfairly acquire a property by bidding more than an offer from somebody else that has already been accepted by the seller. It’s used mainly in British or Australian English.
Some dictionaries suggest it comes from the Yiddish gezumph, to overcharge or cheat. This is supported by the word’s first meaning in English back in the 1920s, to swindle, but others are less sure. These days it is always applied to house purchase.
It takes up to three months in most parts of the UK to exchange formal contracts on the sale of a house. So there’s plenty of time for the gazumper to persuade the seller to accept his higher offer and unceremoniously dump the previous buyer who thought he had a firm agreement. Of course, it takes two to gazump — honest householders stick to their word. But at times when prices are rising rapidly or demand is high, cupidity is easily excited by a substantially improved offer. The term can also be applied to a form of sting in which the person who has agreed to buy is persuaded to increase their offer because of a real or fictitious claim that a better one has been made by somebody else.
When the housing market is depressed, a stranger term appears, to gazunder, in which buyers arbitrarily reduce the offered price, usually near the date of exchange of contracts when there is little chance of the seller finding another purchaser. This appeared in the late 1980s, and is a rather curious blend of gazump and under. It has no connection with the colloquial use of gazunder for a chamber pot, so called because it usually “goes under” the bed.