What is Gazundering?
While it might be a silly word, gazundering is not something to be laughed at. Contrasting the similarly-named gazumping (where a new buyer snatches away an almost-complete property sale from the original buyer with a higher offer), gazundering involves an existing buyer lowering their previously agreed offer price at the last minute. In more unfortunate circumstances, sellers can be forced to accept this lower offer at personal cost or else suffer the entire chain breaking down. While it’s rarely done as an act of malice on the part of the buyer, gazundering is still frustrating and can complicate a property sale considerably. If you’re looking to sell your house and want to avoid gazundering at all costs, take note of the following top tips.
Be Cautious of Chains
Complex property chains can cause all manner of issues to arise at any point in the house-selling process. If your buyers face unexpected costs (or even fall victim to gazundering themselves), they may be unable to afford the pre-agreed price and be forced to lower their offer. Of course, it’s not always possible to deal with a chain-free buyer, but if you can, the likelihood of being gazundered reduces significantly.
Set a Clear Date for Contract Exchange
Setting a firm date for the exchange of contracts will help cement the deal, including its agreed price, in place and prevent the buyer from feeling able to backpedal on its terms. It will also help maintain the momentum of the sale, reducing the time available for complications like gazundering to crop up.
Staying in close contact with your buyer-building a rapport and maintaining a consistent dialogue-will reduce the likelihood that they’ll attempt to gazunder. After all, it may not be illegal, but gazundering is considered by some to be immoral and your buyer will have reservations about attempting it if you’ve built a solid relationship.
Choose Your Representatives Wisely
Professionals in the property market aren’t made equal; it’s always worth investing in the services of a representative with a good reputation who are likely to be members of a trade body such as the National Association of Estate Agents or The Guild of Property Professionals. Not only will a high-quality estate agent be tuned in to the direction of a sale (and therefore able to predict any likely gazundering), but they’ll also help you keep the sale on track. A cheaper agent may be tempting, but they could end up costing you more when all is said and done.
Set a Sensible Asking Price
It’s not hard to imagine how an overvalued property would be more susceptible to gazundering than a reasonably-valued one. If you set your asking price too high, a buyer could feel justified in lowering their initial offer to one that better matches its true value. By setting a realistic asking price from the get-go, your buyer will feel less confident in their ability to talk you down.
Plus, at a lower price, you’ll attract more buyers, which lets you be more selective (potentially landing you a chain-free buyer) and with more competition, your buyer will have less room for negotiation. Both of these further decrease the chance of gazundering.
Avoid Hiding Your Property’s Faults
In hiding any issues or faults in your property, you’re inviting a number of unpleasant experiences, including gazundering. While you may be able to hide damp, a damaged roof or cracked walls for a while, these faults will almost certainly be unearthed eventually, leading to a buyer reducing their offer at the last minute or potentially pulling out of the sale entirely. By being honest and clear about your property from the start, you’ll avoid disappointment, embarrassment and a potential loss of sale in the long run.
If you’re struggling to attract buyers or repeatedly see sales fall through due to underlying property issues being discovered, consider selling your property off the open market. Residential and commercial property buyers like LDN Properties can value and buy your house in a range of conditions for a simple cash sum. Unlike selling a property on the open market, there’s no risk of the sale falling through at the last minute and it can be completed in a timescale that suits you.
Preparing for the Worst
By being honest, upfront and efficient throughout the house-selling process, you may reduce the likelihood of gazundering spoiling your sale, but it’s impossible to protect yourself fully from last minute offer reductions. For this reason, it’s worth preparing beforehand by agreeing on a lowest acceptable price so that you aren’t taken completely by surprise if you fall victim to gazundering.
It can be seen as a sly negotiating tactic, but gazundering is often the result of a buyer’s hand being forced, either by circumstances, the state of the property market or unexpected action somewhere along the property chain. By the end of a sale, the buyer would have incurred significant legal, estate agent and surveyancing fees; by reducing their offer, they’re running the risk of being declined by their seller and seeing those fees go to waste. Don’t assume that your buyer is choosing to retract their original offer: they have a lot to lose too, and likely haven’t been left with a choice.
Gazundering is an unfortunate fact of life in the housing market, and one that stands to harm both sellers and buyers alike. You can protect against it and prepare for it, but you can’t escape the risk of dealing with it at some point.