Gazundering is on the rise. So we’ve asked the property advice website HomeOwners Alliance to set out what it is and how to navigate it if it happens to you.
Gazundering is one of those words you hope never to hear. But it’s increasingly common in today’s housing market. Put simply, it refers to when a buyer lowers their original offer at the last minute, just before contracts are exchanged.
Gazundering is a little different to a buyer renegotiating the price of a property following a house survey. While you might give short shrift to a buyer trying to renegotiate over minor wear and tear issues, substantial problems such as damp or subsidence revealed in the survey could cost a buyer thousands to repair. If a buyer has professional quotes for legitimate repairs to issues highlighted in a survey, then a negotiation and possibly even a relative price reduction seems fair.
But gazundering, with a lowball offer out of the blue and right before exchange, puts sellers between a rock and a hard place: refusing the new lower offer could set the seller back months, risking their chain collapsing and having to find a new buyer, while accepting would leave the seller out of pocket and potentially struggling to afford their onward move.
Why is gazundering on the rise?
Last minute “price chipping” can occur whatever the market. But it seems particularly prevalent at the moment for a few reasons. With inflation on the rise we’ve seen a squeeze on household incomes over the last six months, alongside soaring mortgage rates. Tougher mortgage affordability and a dip in confidence in the economy means a more turbulent housing market. Add to that the fact that house prices nationally are falling and you can see why house buyers have been getting twitchy.
How to avoid gazundering?
So if you’re a home seller, what can you do to protect against gazundering?
Set the right price
First and foremost, set a realistic sale price. Your estate agent can help with this as they’ll know the local market. By setting a realistic sale price from the word go, you’ll be in a strong position to attract early interest, generate positive enquiries from good buyers, and increase prospects of an earlier sale.
Move quickly
The longer the transaction takes, the more anxiety and doubt can grow. So you should aim to exchange contracts as soon as possible. Make sure your solicitor is pushing on with your case and keep in regular contact with them. Also keep in touch with your estate agent and go to them if you’re waiting on something – they should be able to chase things along with the buyer. Read the HomeOwners Alliance guide on how to speed up conveyancing.
Don’t hide anything
If there’s an issue, flag it up as soon as possible. A survey will highlight any problems with the condition of the house anyway, while local authority searches will flag issues in the local area that could impact the buyer’s future enjoyment of the property. The sooner the buyer has the full picture, the sooner they can process it and decide whether they want to proceed, and the less likely you are to fall victim of gazundering.
Accept the lower offer?
If gazundering happens to you and you’re faced with a lower offer, it’s a personal and financial decision on whether you should accept or not. You might decide to absorb the lower offer in order to keep your move on track. And in a buyers’ market you may feel you don’t have a lot of options. Or you can refuse the offer and start again.
Visit the HomeOwners Alliance for more information on gazundering, as well as advice on every stage of selling a home.
As buying agents, we are familiar with this situation as it has happened to some of our buying clients. In some cases, it resulted in impacting on their current property search. In such a situation, it is vital to have a good experienced estate agent on your side, who will know how to handle buyers who are just pushing their luck and will be experienced when it comes to keeping everything on track and getting you to that all important sale.
