What Is Gazundering, and How Can You Deal With It?
Selling your house is already a stressful situation – so the last thing you want is for something to throw a wrench in your plans at the last minute. Unfortunately, that’s exactly what gazundering refers to – but what is gazundering, and how can you prevent it?
In this article:
- What is gazundering?
- Is gazundering legal?
- Is gazundering different to gazumping?
- How to avoid gazundering
- How to deal with gazundering if it happens
What is gazundering
The term gazundering refers to a situation when a buyer lowers their initial offer on the previously agreed-upon sale price. This often happens at the last minute, just before contracts are exchanged. At this point, sellers are vulnerable – especially if you’re in a long chain, and buying a new property at the same time as selling yours. Rather than risk pulling out of a house purchase before exchange, sellers might feel that they have to accept. If sellers reject the new, lower offer, they could end up back at square one – so they often feel forced into accepting the offer, even if it’s drastically underselling their home. Rejecting an accepted offer could end up collapsing the entire chain of purchases – so gazundering can be a real nightmare for sellers and buyers alike.
Is gazundering legal?
While it might feel unfair, gazundering is legal. Gazundering isn’t always down to a buyer being cheeky or manipulative – sometimes it could be due to something being found in the home survey which affects the value of your house, or thanks to an issue elsewhere in the chain. If you’re not sure if your buyer is trustworthy, make sure you follow our tips on how to prevent gazundering.
Is gazundering different to gazumping?
Gazumping is the term for when a seller has already accepted your offer, but rejects it in favour of another (usually higher) offer, and is a nightmare for buyers. In contrast, gazundering is a risk for anyone selling their property – so yes, in theory, if you’re in a long chain you could be in the nightmare position of being both gazundered and gazumped.
How to avoid gazundering?
In an ideal world, the process of selling your house would be seamless and smooth – but things can happen that cause issues like gazundering. Here are a few ways you can try to head off gazundering at the pass.
Set a date for exchanging
Not all purchases can work like this, but it’s good to get a potential date in place for exchanging contracts. This gives everyone a date to work to, and will encourage your buyers and solicitors to move quickly.
Get the survey done quickly
If you can, pre-empt the survey – if you know what’s likely to come up, consider getting it fixed before selling, and if you’ve had work done recently, make sure you’ve got the paperwork to prove it. For example, if you’ve got any winter damage to your home’s exterior, try to get it fixed before surveys take place. Get your survey out of the way as soon as you can, so you can head off any issues. Also, keep the pressure on your buyers to get their survey done quickly (if they’re also selling) so everything can move smoothly.
Choose a good agent
Make sure you choose a reputable and well-experienced agent – they’ll know the warning signs for a buyer who might try gazundering, and will be familiar with sneaky or underhanded behaviour. They’ll do everything they can to help the sale go through smoothly, and make sure it’s well managed.
If you set your asking price above where it realistically should be, there’s more chance that a buyer might lower their offer, either if anything turns up in the survey or once they’ve had chance to get over the initial rush of falling in love with a property.
Don’t inflate the value of your home – be honest, realistic and practical about any issues or significant repairs that need doing. A survey will highlight any issues with the property or grounds, so don’t try to hide anything or it might put you in a worse situation than if you’d just been honest and gone for a more realistic asking price.
Look out for warning signs
If a buyer offers significantly over your asking price, they might be planning to knock down that price the closer you get to exchange. Unfortunately, some unscrupulous buyers will offer over asking price knowing that they’ll have you over a barrel, especially if there’s low demand or any issues with the housing market.
Obviously, everyone would prefer that the entire process of buying and selling could be speedy – but to avoid being left in a sticky situation, make sure that your solicitors are able to move fast to avoid any wriggle room from a sneaky buyer. Ensure that your solicitors have all of the information that they’ll need from you ahead of time, and stay in regular contact to make sure they’re pushing through the sale.
Keep in touch
If possible, speak to your buyer at least a little bit and get a feeling for them – solicitors and agents don’t usually love you having contact, but if you have a chance to chat and build a relationship, they might be less likely to do something like gazundering.
How to deal with gazundering if it happens
If you’re in the unfortunate position of having an offer on your home lowered, your next move will mostly have to be a judgment call based on your specific scenario – but you do have a few options for what to do if you’re gazundered. Make sure you speak to a financial advisor or your estate agent before you make any moves.
If you think that the offer is unfair, and that the buyer is just pushing their luck to see if you’ll accept a lower offer, you could try standing firm on your agreed upon price. If the buyer has already spent a lot on surveys or solicitor’s fees, they might not want to lose all of their investment. It’s a risk, but in some situations it could pay off.
Renegotiate the price
If your survey has turned up some issues with your property and your buyer thinks the property’s initial price was too high in light of this, offer to renegotiate – you might be able to meet in the middle, or negotiate to include fixtures or appliances in the sale instead.
Worried about suffering from gazundering? If you’re looking to sell your home with no chain and no complications, you can sell your home for cash with Good Move, and avoid any kind of unfortunate situation like gazumping or gazundering. We’ll pay up to 85% of the market value (depending on location), and sell your house within days – not months. If you’re looking for other guides on selling and buying your home, plus lots of other great tips and guides on everything to with homes, check out the Good Move blog.