What is Gazundering?
Estimated reading time 8 minutes
Selling your home should be a positive, exciting time, but unfortunately many sellers face the nightmarish experience of gazundering. It’s a deeply frustrating scenario that can leave you feeling stressed out and wondering what your next move should be.
This is why we’ve distilled our decades of property market experience into a handy guide to answer your gazundering questions, such as:
- What is gazundering
- Is gazundering legal in the UK?
- How common is gazundering?
- How to prevent gazundering?
- How to respond to gazundering?
So whether you’re here because it’s already happened, you’re worried it could happen, or you just want to know more, we’re here to help. This guide breaks down everything you need to know about gazundering.
What is gazundering?
Gazundering is where a buyer, having already made an offer that you’ve accepted, reduces their offer, usually close to the time that the contracts are due to exchange. Sometimes it can even happen on the day you’re due to exchange contracts.
Gazundering became widespread in the 1980s due to the decade’s housing market deregulation, skyrocketing house prices and buyers having a legal advantage over sellers.
Is gazundering different to gazumping?
While the terms are easily confused and arguably they are two sides of the same coin — but there’s a big difference.
Gazumping is when a seller initially accepts your offer but then receives a more attractive (typically higher) offer, leaving the original buyer high and dry, and possibly out of pocket with legal fees and surveys. If this happens to you, you’ve been gazumped.
But the two terms have plenty in common: They both describe an action that seems to come out of nowhere and cause a total nightmare if you’re on the receiving end — and they’re both considered potentially cynical and rather sneaky.
What’s more, either action can happen to anyone who’s selling on the property market. And, yes, this means you could have both happen to you in theory, but fingers crossed you aren’t so unlucky.
Is gazundering legal?
Yes, gazundering is legal in England and Wales. This is because until contracts are exchanged, nothing is legally binding, meaning that there’s nothing stopping either party renegotiating or pulling out.
In Scotland, however, buyers don’t make an offer until they’ve had a survey done, then once a deal is done it’s legally binding. This means that any backing out can result in legal ramifications. So if you’re buying in Scotland, you’re far less likely to get gazumped or gazundered.
But while it’s technically legal, it is disapproved of. It can cause intense stress for sellers, as well as financial loss. Plus it can damage the relationship between buyer and seller and eradicate any sense of goodwill.
That’s not to say that sometimes there aren’t good reasons for renegotiating the price — particularly if the survey has revealed some unexpected issues. But there’s a difference between this and a last-minute lowball to see if the seller will cave.
So, while gazundering won’t land you in jail, it’s widely frowned upon. But exactly how common is gazundering?
How common is gazundering?
Throughout 2023, 26% of all home sellers in England and Wales were gazundered according to recent research — and around For sales in London, that figure trebles to a shocking 75%.
Concerningly, both figures are up on the previous year’s figures, making gazundering a growing risk for sellers in England and Wales.
How do you avoid gazundering?
The truth is: you can’t stop a buyer from gazundering you. But there are steps you can take to help reduce the chances of it happening to you:
Set a competitive yet realistic asking price
It’s tempting to set a high asking price to see what happens, but an overly inflated price might attract gazumping attempts. A fairer price is more likely to attract serious buyers.
Be transparent about any potential issues
Issues you try to hide now will become bargaining chips later for your buyer. Be upfront about any potential problems. Not only will you build trust, but you’ll hopefully avoid post-survey price drops.
Focus on buyers who are ready to proceed
Seek out buyers who are chain-free and prepared to move quickly. Opting for such a buyer means not only can you sell your house fast, but you’ll be keeping the window of opportunity for gazundering to a minimum too.
Become a communication champion
It’s harder than it sounds, but well worth it. Keep everyone up to speed, and you’ll find that it improves relationships, maybe even helps the sale progress more smoothly. This approach fosters trust, which makes buyers less inclined to try a less-than-friendly tactic like gazundering.
Set a target exchange date
The conveyancing process is notoriously slow, with solicitors and other parties moving with seemingly no urgency. Setting a clear date for exchange of contracts means there is a concrete timeline, which will help to focus everyone’s minds on the finish line.
Make a backup plan
You can’t be blindsided if you already have a plan B. Think about what you’d do if gazundering happens. This preparation will help you handle the turbulence of the situation should it occur, will prevent you from panic-accepting lowball offers, and will strengthen your bargaining position overall.
That leads us nicely into our guidance on how to respond to gazundering.
What to do if you’ve been gazundered
If you’re unlucky enough to have an offer on your home lowered, the ball is in your court, and you must think carefully about your next move. What you do next will depend on your particular situation, your priorities, and your bargaining position.
Here are our top tips for how to respond to gazundering:
Remember that walking away is an option
It might not feel like an option (or at least not a very appealing one), but much like making an inflated offer for a home you want to buy, the wrong deal can lead to negativity and resentment down the line.
You have the right to reject the lower offer. Yes, this may well lead to the sale falling through, but new buyers come along regularly, provided your property has wide appeal. And if not, there is always the option of a cash house buyer — more on that later.
Stay strong
Be objective. Does the offer seem fair, or is it possible that the buyer’s just using this as a last-minute strategy to get a discount? If you’re confident that the new lower offer is unjustified, see what happens if you stick to your guns. It’s a risk, but sometimes the buyer just tries it on. It’s likely that in reality they won’t want to waste the cash they have already spent on surveys and legal fees and they may come to their senses.
Flex your negotiation muscles
If you think your buyer may be justified in lowering the price (i.e. if the survey has found some issues, and the buyer feels that the original price didn’t reflect these), you can always offer to negotiate.
It’s possible to find a happy medium price wise, or maybe you can include some fixtures or appliances instead of a price drop. You may need to justify your asking price at this point, so be ready to point to recent similar sales in your neighbourhood, as well as any appealing character features and any upgrades you’ve made which have added value.
Explore alternative options
Depending on your situation, you might want to look into other solutions that will allow you to move on with buying your next home in spite of your buyer’s try-it-on tactics. These include a bridging loan, selling at auction, or selling to cash house buyers.
Why use a cash house buyer when you’ve been gazundered?
If you’re worried about the risks and repercussions of gazundering, we totally get it. Not only is it an extremely stressful experience, but it’s shockingly common. It stands to reason that so many sellers in 2024 are choosing to sell with no chain and no complications by selling their home for cash.
SellHouseFast.co.uk’s uniquely personal, transparent and smooth process means you can sell your house fast and avoid any chance of unfortunate getting gazundered. Even better, we buy any house in any condition, UK-wide.
Contact SellHouseFast.co.uk today for a no-obligation free cash offer, and find out how we can make things easier for you.
