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Gazundering is a term derived from “gazumping” (a seller accepting another offer after having sold the property) and it refers to when a buyer lowers their offer just before the exchange of contracts in a property sale. This reduction is unexpected and can be the result of a buyer responding to market changes or property […]
03 January 2024
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Gazundering is a term derived from “gazumping” (a seller accepting another offer after having sold the property) and it refers to when a buyer lowers their offer just before the exchange of contracts in a property sale. This reduction is unexpected and can be the result of a buyer responding to market changes or property surveys, but it can leave sellers in a challenging position, often feeling pressured to accept the lower offer, due to concern that the sale will fall through. In this article, we delve into gazundering, its prevalence, legality, fairness, and strategies to manage or prevent it.
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Gazundering occurs when a buyer, after initially agreeing on a purchase price, lowers their offer before the sale completes. This can happen at various stages but typically takes place just before the exchange of contracts.
While not the norm, gazundering is not unheard of and its frequency may be influenced by changes in market conditions, a drop in buyer confidence, changes in the personal circumstances of the buyer and other external factors impacting property values.
In the UK, where property transactions often involve a chain of buyers and sellers, gazundering is legal. Until contracts are exchanged, while it is not completely ethical, either party can alter the agreed-upon terms and even pull out of the sale or purchase completely.
While legal, gazundering is widely considered unfair and can strain the trust between buyers and sellers. Sellers may have already invested time and money based on the agreed-upon price, making a last-minute reduction feel unjust and like the buyer is just trying to save some money at the last minute. However, in certain circumstances, it may be the only option for the buyer. For example. If market conditions have drastically changed or, if they have sold their own property to fund the purchase and their own buyer has reduced their offer.
While legal, gazundering introduces ethical considerations, sellers and buyers alike should approach these situations with open communication, understanding, and a willingness to negotiate fairly, to ensure a fair and successful transaction for all parties.
From mortgages and insurance to viewings, offers, exchange and completion, our Buyers’ Guide will take you through everything, step by step, from start to finish.
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