Gazundering happens when a buyer lowers their offer last minute, just before the contracts are exchanged. This can leave the seller in a difficult and stressful position, as they could lose the buyer and collapse the chain, which means starting the process all over again.
To prevent this from happening, many sellers choose to accept the lower offer, but is this the right move? In this guide, we’ll take you through why gazundering happens and how you can stop it from happening to you.
Is gazundering legal?
Gazundering is an unfortunate and frustrating scenario, but it is completely legal. If a buyer chooses to drop their offer before contracts are exchanged, there is no law stopping them from doing so and they may even have a good reason for it.
Why does gazundering happen?
There are a few reasons gazundering can happen. Firstly, the buyer will most likely have a survey carried out, and if issues that lower the value of the property are flagged up, the buyer may choose to decrease their offer.
This could also happen when there’s a drastic drop in the property market. The buyer may then reduce their offer to reflect the current house prices in the local area.
While these reasons are understandable, there are some occasions when the seller is left feeling swindled or tricked. For example, a buyer can gazunder their seller because they know the seller has taken their property off the market and are in a chain themselves, and so may be more likely to agree to the lower offer.
How to avoid gazundering as a seller
Avoiding gazundering isn’t simple, but it is possible to reduce the chances of it happening. If a buyer offers you a lower price, you can refuse it, but if you’re in a chain or needing to move home quickly, you might feel backed into a corner. Here’s what you can do:
Choose a chain-free buyer
There’s no need to turn away buyers just because they’re attached to a chain, but if you do receive a good offer from a chain-free buyer, it’s a good idea to accept. Buyers with no chain may be able to move faster as your sale will not be reliant on the sale of their current home.
Related: Property chains explained
Set a date for exchange
Secure a date with your buyer for exchanging contracts as soon as possible. This will keep everyone in the loop and working towards the same end goal. It also subtly applies a little pressure for everything to run smoothly and in a timely manner.
Keep in touch
It’s important to keep in touch with your solicitor and agent throughout your process and make sure your sale is being handled as efficiently as possible. You could also make sure your agent stays in touch with your buyer’s solicitor to make sure everything is running smoothly on their end.
Set a realistic price
From the offset, make sure your asking price is realistic and accurate by having your property valued by a local agent. If your asking price is above the home’s actual market value, this gives the buyer more opportunity to lower their offer, especially if the survey flags up any problems.
A buyer may offer your asking price initially to secure the sale, and then decide to lower it later, but you will be in a better position to stand your ground if your asking price is fair and accurate.
Get a good agent
An experienced agent will be well-versed in handling buyers who are attempting to gazunder without good or fair reasoning. Have a trustworthy and reputable agent like Martin & Co on your side, and they will be able to guide you through the moving process and have your back when things don’t go to plan.
Don’t try to hide anything
Failing to disclose issues with your home will only harm its value in the long-run.
You must be completely transparent when selling your home as buyers will find out all there is to know in a survey, regardless of whether you decide to tell them upfront. Don’t give buyers the chance to lower their offer by sweeping things under the rug.
Do your sums
Budgeting and planning is an integral part of the moving process. If you’re going to be part of a chain or if you know you need to move quickly, find out what the lowest offer you are happy to accept will be.
This is a good way to prepare for gazundering, as you will already know if you can afford to accept the lower offer and still move.
If you have any questions about selling your property or choosing an estate agent, speak to your local Martin & Co office who will be happy to help.