Published: 01/12/2021As a seller in today’s world, there are many terms to get to grips with. Gazundering and gazumping are just two of the main ones that can cause big problems. We've explained Gazumping which mostly affects buyers, so now we thought it was time we explained Gazundering which is something that hurts the seller the most and can be highly frustrating.
If you’re wondering what gazundering is, whether it’s illegal, and how you can avoid it when selling your home, here’s everything you need to know about the subject.
What is Gazundering?
Gazundering is when a buyer lowers their offer at the last minute, usually just before you’re about to exchange contracts.
It’s completely different from gazumping when a buyer is outbid at the final hour, and a seller accepts. But it’s just as big of a problem. Gazundering can lead to delays in the property chain, a loss of money, and even a fall through in the sale.
Is Gazundering Illegal?
If the next question you’re asking yourself is ‘Is gazundering even legal?’, unfortunately, yes, it’s legal in the UK. The contract for the sale only becomes binding at the point of exchange, so gazundering is allowed by law. But whether it’s ethical is a different matter!
Why Does Gazundering Happen?
There are many reasons why a buyer could offer a lower price at the last minute. It could be for genuine reasons, like the survey showing costly works, or they’ve been gazundered themselves and can no longer afford your home.
But it could be for other, less favourable reasons too. Some people gazunder because of a miscalculation in finances, a change of heart, or to be sneaky to get a cheaper deal.
How to Avoid Gazundering
While there’s always a risk of gazundering when selling your home, there are some things you can do to avoid it. Here are Circa London’s top tips on how to prevent gazundering.
Get a Realistic Valuation: One of the best ways to avoid gazundering is to make sure you get a realistic valuation in the first place. If you know about your property issues, be upfront with your estate agent. And don’t worry about losing buyers – there’s a market for everything.
Consider Paying For A Survey: Sometimes, you don’t know about issues with your home until the survey. If problems are uncovered, consider whether you’d be prepared to fund the works wholly or partially by doing it yourself or accepting a lower offer. Either of these things could help keep the buyer on your side.
Choose a Good Estate Agent: Choosing a good estate agent is always important. But it could also be the best trick in the book to avoid being gazundered! While an estate agent can’t prevent gazundering entirely, they can help you find a suitable buyer. They’ll establish how serious a buyer is and won’t pressure anyone into a sale they’re not committed to.
In conclusion, gazundering can occur due to a variety of reasons, including survey results revealing defects, chain reactions in property purchases, miscalculations by the buyer, changes of heart, and slow solicitors/agents leading to expired mortgage offers. It is important to understand these factors to help mitigate the potential impact of gazundering.
Are you selling a property in central London? If so, make sure you’ve got an expert on board. Circa London is a leading independent central London sales and lettings agents our friendly team of agents is here to make the sale of your home go smoothly.