How Do Sellers Avoid It!?
For those not sure what gazundering is, it’s a term used to describe the action of a buyer who lowers their offer on a previously agreed sale price, just prior to the contract being signed. Why – you might ask? Well of course some buyers do it purposefully to take advantage of a seller in a desperate situation but in some cases it isn’t through the buyer’s choice. They could be reacting to an event in the chain, or findings in the survey.
Gazundering is an absolute nightmare for sellers (no surprise there) because the seller is put on the spot, they must either accept the lower figure, or reject it and start the entire sales process all over again. Not a happy dilemma.
Putting the seller in such a difficult position can then trigger a chain reaction. If the seller is pressured to accept a lower offer on their property, they may be forced into reducing their offer on a potential acquisition.
In England and Wales, there are no binding agreements on sale price until the contract stage therefore when house values are falling – gazundering starts to come into fashion. However on the opposite end of the scale when house values are rising, we see gazumping – when a seller takes a late offer from another buyer which is higher than the originally accepted figure.
It’s a rotten situation for the seller to be put in, so here’s what we advise you to do to reduce your chances of being gazundered:
Listen to your valuer
If your property is priced realistically and on the market for the right price – you have a better chance of receiving an offer quickly. The less time it takes you to get an offer, the less desperate you will be to sell at any price. Some buyers will check to see how long your property has been on the market for and if there have been any previous price reductions to determine whether they try to negotiate a lower deal so be aware of this.
IF possible, opt for a chain free buyer
The quicker that buyer can move, the more valuable the offer. A buyer who already has a mortgage offer in place with no ties to another property may be worth lowering your price for.
Be honest about any defects
The more transparent and up front you are about defects in your property, the less likely they are to come back to haunt you in a survey. If they are declared and factored into the agreed price, the buyer cannot use them against you further down the line.
Consider shortening the chain
It might be a sound option for you to sell your home and rent for a period of time to shorten the chain. This means you will not be forced into accepting lower offers as your position is not a weak one.