With UK house prices falling for the first time since last summer, it looks like we're entering a buyer's market. When prices are low and property supply outweighs demand, buyers have a lot more negotiating power – and sometimes this translates into unethical practices. Here we take a look at gazundering: what exactly it is and how you can avoid it.
What is gazundering?
Gazundering is when a buyer lowers their offer at the eleventh hour, just before the contracts are signed. Due to how house sales work in England and Wales, nothing is final until both signatures are on the paper. While gazundering sits on shaky moral ground, it's not illegal – just very frustrating for sellers.
What does gazundering mean for sellers?
Being gazundered leaves sellers in a tricky spot. They can either accept the lower price (and potentially renegotiate the mortgage) or go back to square one. If your property is in a chain, it will collapse and leave a lot of people in a tight situation. Rejecting the new offer means spending more money too – government research has found that it costs sellers between £582 and £740 when a sale falls through. Combine that with the existing additional costs of selling your home in 2018 and you can see why many simply accept.
What does gazundering mean for buyers?
In fairness, not all gazundering comes from a place of greed. In some cases, buyers might realise they've offered too much after getting their survey back and discovering faults with the property. If you're the one purchasing, it's completely acceptable to reduce an offer at a late stage if you've realised the seller hasn't been honest about what their home is worth.
How can you avoid being gazundered?
- Get an accurate valuation.
If your price is too high, your home will sit on the market for longer, leaving you more likely to accept any offer.
- Communicate with your buyer.
Radio silence can leave them feeling anxious and reduce their trust in you.
- Move the sale along as quickly as possible.
This will lower the chances of your buyer pulling out or changing their offer.
- Be honest.
If there are any issues that might be flagged by the survey, mention them early.