Gazundering and your property

Gazundering is the slightly dubious practice of a prospective buyer putting an offer on a property which the seller accepts, and then swooping in with a lower offer just before completion. The buyer is counting on the seller obviously keen to sell and not wanting to re-market their home all over again.

For example, the buyer puts their offer of £150,000 on the table for the property which the owner agrees with, only for the buyer to then gazunder them by offering £120,000 just before final contracts are exchanged. In the current state of the market, it now seems that gazundering is on the rise.There is absolutely  no reason for this reduced offer. It hasn’t been made due to any structural problems being discovered by a team of surveyors. This is a very underhand pre-conceived tactic that the buyer is applying to save cash by praying upon the sellers insecurities.

Gazundering is likely to occur when the market is experiencing turbulence, as is presently the case. With property values falling in many regions, building societies and the like are increasingly unable to obtain the funds to provide mortgages as we feel the effects of the credit crunch, and buyers are finding it challenging to say the least to obtain funds and are trying to reduce their spending, even if they obtain a good deal through ungallant means. If the seller rejects a gazunder offer, this can cause the chain to collapse like a stack of dominoes and leave several  parties back to where they started.

How do we avoid being gazundered?

Have your property realistically valued and then set a genuine, acceptable price. If your home is over-valued, that might well be the excuse that buyer needs to gazunder. Their defence is that greedy homeowners that are fuelling an over-inflated property market deserve to gain less cash than expected, property at a price that reflects a true and fair value.

Think about making it a stipulation of the sale that buyers must pay a deposit and agree to a contract that ties them into completing the sale at the agreed amount, with a deposit put into a solicitor’s account and a deadline set for the final exchange of contracts. Paying a deposit is quite a regular practice overseas and the deposit is lost if the buyer aborts without a solid reason.

Finally, it never hurts to be on friendly terms with a buyer. If the buyer is able to see that the vendor is a person that would be hurt by such actions, their conscience might stop them from attempting to gazunder.

Even if a buyer attempts a gazunder, there is still hope. A vendor can reject the gazunder offer, even on principle, and maybe the buyer will still complete the purchase at the original agreed price. The buyer has paid for a survey, perhaps built up an affection for the property and perhaps done a deal with their current home. As a last resort, it might be possible to reopen talks and try to reach an accommodation instead of accepting the gazunder offer.

Watch Out…..!!

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