I recently wrote about the dreaded act of gazumping, which is essentially the act of accepting a higher offer after verbally agreeing to sell your home to a particular buyer. (Check out my gazumping guide to learn more).
Today, I’d like to talk to you about gazundering. While the home buyers are the victims of gazumping, sellers are the victims of gazundering. Read on to learn more.
What is gazundering?
‘Gazundering’ occurs when a home buyer lowers their offer at the last minute, just before contracts are exchanged. Perhaps a seller has agreed to sell their property to them for £200,000 but at the last second the buyer says “Actually, we’d only like to give you £195,000.”
This puts sellers in a difficult position as they’re now left with the decision of whether to accept the lower offer and continue with the sale or abandon the sale completely, potentially causing problems when it comes to finding/buying a home to move into.
Which sellers are most susceptible to gazundering?
Any seller can be affected by gazundering, but the sellers likely to be worst affected by such a process are those whose home is a part of a chain of properties and therefore they’re under greater pressure to accept the lower offer.
Let’s say for example your home has been on the market for several months while you’ve been looking for a new place. You’ve finally found your dream home and the sellers have accepted your offer. You’ve also found a buyer for your own property, but they’ve reduced their offer at the last minute. If you reject their offer, this causes issues for the house you’d like to buy because the people living in that house will want to complete on the sale but you won’t be in a position to do so until you sell your own!
Is gazundering legal?
Frustratingly, gazundering is totally legal and there’s nothing to stop buyers from dropping their offers before contracts are exchanged.
Why do buyers gazunder sellers?
Often, buyers who choose to gazunder a seller do so because they know the seller is in a weaker position and is therefore likely to accept the lower offer out of desperation – saving the buyer a few thousand pounds.
However, some buyers will gazunder for the following reasons:
- Houses prices fall
- They’ve learned information about the property that they believe makes it worth less than their original offer
- They’ve found another property they’re also interested in but will buy yours if you’ll sell it for less
- They’re in a chain themselves and have been gazundered by their own buyers
How can I avoid gazundering happening to me?
Unfortunately, there’s not much you can do to prevent cheeky buyers exploiting your desperation to sell your property, but there are some steps you can take to protect yourself from issues that arise from honest buyers who need to lower their offer due to their own circumstances.
Choose a chain free buyer, if you have the choice
If you’re lucky enough to have interest from several different buyers, agreeing to sell your property to a first time buyer or someone who isn’t part of a chain can help you to minimise the amount of risk involved.
First time buyers and chain-free buyers are more likely to act fast and less likely to encounter issues during the process due to the fact they don’t have a home to sell.
Price your property appropriately
Don’t get greedy or price your property too high. If you set your property price much higher than what it should be there’s a greater risk the buyer will reduce their offer.
This can particularly be the case if a buyer falls in love with your property but once they’ve calmed down and the initial euphoria has worn off they have a reality check and realise they overlooked a few things. By setting a fair price from the start you can reduce the chance of this happening.
Use a trusted agent
A trustworthy agent will have experience of buyers looking to save some cash at the last minute and they’ll have ways of handling the matter. I realise that I’m making agents sound like gangsters here, but don’t worry, I don’t think any kneecaps will be broken.
Don’t try to hide issues that could affect the property’s value
In an eagerness to sell your property, you may feel tempted to hide problems with the property or the area it’s in. However, failure to disclose anything that could affect the property’s value could see your getting gazundered at a later date if the buyer finds out.
It’s a sad reality that aside from keeping your end of the bargain and being as honest as possible, there’s not much you can do to avoid getting gazundered.
