Gazundering: What It Is and How To Protect Yourself Against It
The UK property market can be a challenging and competitive arena, and one of the most frustrating experiences for a seller is being gazundered. Gazundering, a phrase that has gained popularity recently, describes a scenario in which a buyer decreases their price soon before the exchange of contracts. When this happens, sellers could feel discouraged, especially if they spent time and money getting the house ready for sale. This article will examine gazundering, and its effects on sellers, and offer some advice on how to prevent it. Leaders estate agents in Leeds can help you navigate the market to find the best properties at the best price without any fuss.
What Exactly Is Gazundering?
We are all familiar with the infamous practice of gazumping, in which a house seller accepts a higher offer for their property despite having previously sold it to another party (with respect to contracts having been exchanged). But not all real estate agents act unethically.
It’s called “gazundering” when a buyer suddenly decreases their price right before contracts exchange hands. Sellers sometimes feel pressured to accept since turning down the new, lesser offer might mean starting over and causing an entire chain to break apart.
Is Gazundering A Permitted Activity?
Tragically, gazundering is permitted. Until the contracts are exchanged, a buyer is under no restrictions to abandon their offer.
Is Gazundering Acceptable?
Most of the time, it’s not. When a buyer “gazunders” a seller, they often do so because they are aware of the seller’s disadvantage (their property has been removed from the market and they are in a chain themselves), so they try to exploit the opportunity and save a few thousand dollars.
However, if the buyer discovers information about your home that affects – or may diminish – its worth, it’s fair that the price will be a worry. After problems are noted in the survey, buyers will occasionally lower their offer. Or, if real estate values have dropped significantly after the initial offer was made, this can also prompt a buyer to lower their offer.
Additionally, if your buyer is also in a chain, it’s possible that the offer on their own home may be lowered, leaving them with little choice but to lower the price they can pay for yours.
How Can I Prevent Gazundering From Occurring To Me?
If the buyer is only a chancer looking to save some money, there isn’t much you can do (other than reject the new offer, of course), but there are steps you can do to safeguard yourself from real purchasers dropping their offers:
- Select A Chain-Free Buyer:
It goes without saying that you won’t start rejecting buyers because they are part of a chain if they make a decent offer. However, if you’re in the fortunate situation of receiving a flood of inquiries, you should give preference to buyers without a chain. They are more likely to respond swiftly, and there is less likelihood that they would pass on to you late-day increases in expenses or problems with affordability.
- Decide On An Exchange Date:
Get a date set for when you hope to exchange contracts as soon as you can. This is a wonderful method to keep the persons involved committed to the date since it gives them something to strive towards and increases the pressure.
- Move Swiftly:
Keep in touch with your attorney frequently to ensure that they are moving your case along. To make sure everything is proceeding properly from the buyer’s side, your agent should maintain contact with the buyer’s attorney.
Maintain communication with the buyer as well, if you can. Agents and solicitors often prefer that the buyer and seller do not communicate, but if you get to know them and have frequent interactions with them, they are less likely to do something shady like gazundering.
- Be Fair With Your Asking Price:
There is a greater likelihood that a buyer would drop their offer if you set the price of your home far higher than it should be. When a buyer develops affection for your house, they can hurry to make an offer and try to close the deal by giving you the asking amount or perhaps more. After surveys are completed and the buyer has had some time to reflect, they can opt to go lower. There is a lower likelihood of this occurring if you set a reasonable pricing.
- Hire An Excellent Real Estate Agent:
When it comes to keeping things on track and completing that crucial transaction, a skilled estate agent will have experience dealing with pushy buyers and know exactly how to deal with them.
- Try Not To Conceal Anything:
You’re putting yourself up for failure if any issues with the home or the neighbourhood are not fully disclosed. Any problems will be revealed by a survey, and most buyers will research the region well, so whatever you’re hiding will eventually become evident. When that happens, the buyer will either back out, drop their offer during the survey, or, worst still, wait until the very last minute to decide before pulling out because they couldn’t accept the newly acquired knowledge, which will leave you back where you started.
- Prepare Your Money:
Run the numbers. Calculate the lowest offer you will take if you are in a chain and need to move even after a favourable offer has been accepted. Having a firm understanding of how low you’re willing to go will help you be ready in the event that the buyer does lower their offer.
In conclusion, gazundering may cause worry and frustration for UK property sellers. Following the above guidelines can help sellers get a fair price for their home and avoid the disappointment and frustration of getting gazundered.