Gazundering is back: how to avoid the cheeky buyer

Gazundering is back, causing headaches for sellers up and down the country in a cooling property market. A news story published on Property Industry Eye reported that almost a third of sellers have been gazundered during the last six months. For half of those, it happened in the two weeks leading up to their exchange date. Worryingly, a third said it had happened in the week before exchange.

What is gazundering?

Quite simply, gazundering is when a buyer lowers their original offer on a property at the last minute, usually just before contracts are due to be exchanged. Sellers in this position often feel they have no choice but to accept the reduced offer to prevent the entire chain collapsing. For some, however, accepting a lower price could be financially risky, impacting their onward move.

Why might buyers lower their offer at the last minute?

There are lots of reasons why buyers might decide to lower their offer. These include:

• Survey results that highlight something unexpected, such as issues that would be expensive to rectify or that make the property less valuable than the advertised sales price.
• The domino effect. If someone in the chain below has been gazundered, they may have no option but to reduce the offer they are making as they are receiving less for their own sale.
• The buyer’s financial situation may have changed, or they may have overestimated what they can afford, making the property unaffordable at the agreed price.
• Property prices may have suddenly dropped, making their offer much higher than the property is now worth. This may have been identified by the mortgage lender’s surveyor – known as ‘down valuing’.

What can sellers do to avoid gazundering?

There is not much you can do to avoid gazundering, especially as a lower offer almost always comes as a shock. Although it is viewed as an unethical practice in some cases, it is not illegal. There are, however, lots of things you can do to lower the risk of gazundering:

• Make sure your property is advertised at a fair and realistic asking price from the start.
• Be honest about any problems the property may have. A buyer is more likely to gazunder if they find out about significant issues in their survey.
• Offer to pay for issues raised in the survey to take financial pressure off the purchaser.
• If you have the chance, opt for a buyer who is chain-free and not at mercy of being gazundered themselves.
• Aim for a speedy exchange to narrow the window for gazundering to happen.
• Ensure a purchaser has a mortgage agreement in principle or opt for a cash buyer.

A good agent can help too

Having a good, knowledgeable estate agent on your side can be a big help. Move Places will advise you on the best strategy to get your home sold quickly in today’s market. This will include setting an achievable, realistic asking price, vetting all purchasers so only the strongest, most genuine buyers proceed, and guiding the seller through key milestones, such as accepting an offer, the survey and exchange. Get in touch today to sell house fast.