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What is gazundering? This may or may not be a term you’ve come across before, depending on how often you find yourself on the property market. There’s a chance you may have even been gazundered without knowing.
First came gazumping, the frustrating moment when you’ve had an offer accepted on a house but the seller accepts a higher offer from another buyer and lets you down. And now the market is seeing a similar trend with gazundering, which is the opposite in a sense.
To explain it properly in more detail we spoke to the property experts to find out the truth behind the phenomenon and discover ways to avoid becoming a victim of it. Because even if you have all the latest interior design features that will help sell your house and a buyer in place it can still happen unexpectedly.
What is gazundering? Experts reveal all
Whilst you may be acquainted with the term Gazumping, you may have not yet heard of the new word on the block Gazundering. Although similar the two do have stark differences when it comes to who it affects and how.
“Gazundering is the practice where a buyer, who has previously agreed to purchase a property at an agreed price, suddenly reduces their offer just before the deal is about to exchange contract.” explains property expert Mark Manning, who is managing director of Yorkshire-based estate agency group, Manning Stainton. Mark does however warn that this action shouldn’t be confused with the need for a genuine renegotiation.
Renegotiations can start due to several adverse circumstances, explains Mark. “Something like a legal factor or an issue raised by a survey. It’s the timing of the offer reduction which makes it gazundering,” he says.
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Not only has Mark been the director of Manning Stainton for over 25 years but he is also the Group Managing Director of the Northern Estate Agencies Group. When it comes to industry experience Mark has no shortage, he also directs the Lancashire-based estate agency group Ryder & Dutton.
How common is Gazundering?
If you’re selling your home you may be slightly concerned at the prospect of this happening to you. But before you cancel those home improvements to add value pre-sale, don’t worry, Gazundering is a lot less common than people think.
“According to Rightmove research, 33% of all property deals will experience an issue at some point in the process between being sold subject to contract and completion, and a lot of the time, this is due to things like surveys revealing unexpected issues or a down valuation by a surveyor,” explains Mark.
So while it does happen, it’s usually for reasons that can be explained or even prevented. Mark also points out that in times when house prices are falling, it does tend to become more prevalent than in times when prices are increasing.
How can I prevent Gazundering?
Luckily there are several steps you can take to avoid this happening to you, of course, there is no guaranteed way of stopping it completely but these expert-recommended tips should keep you and your buyer happy.
1. Choose a chain-free buyer
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Should your home be particularly sought after, perhaps you live on a type of street that could boost your property value, then there is a specific step you can take.
Property experts at estate agents Martin & Co. say that if you’re in the fortunate position of being inundated with interested parties then you should favour chain-free buyers.
“Buyers in this position are more likely to move quickly and there’s less chance they will be surprised by additional, last-minute costs or affordability issues that they will try to pass on to you via gazundering,” they explain.
With other 150 offices nationwide, Martin & Co. are a well-established and trusted estate agent when it comes to letting and the sales of houses. Their experts have years of industry experience selling homes and they often publish helpful guides with information about everything from new-builds to being a landlord.
2. Set a realistic asking price
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When selling a home people often have a dream price in mind, something we may know might not happen but they strive towards it anyway. And as much as it’s good to aim for as much as possible this can lead to problems down the line.
Mark says, “The best way to prevent gazundering is through properly pricing a property, as it creates competition.” Beware of the home improvements that don’t add value in the way you might have hoped, such as the bespoke kitchen you love but that doesn’t offer timeless appeal to a potential buyer. It’s important to be realistic, not sentimental when pricing.
“By doing this you can make it abundantly clear to the buyer at the outset that no re-negotiation will be considered under any circumstance,” he continues. “And of course, that buyer should also be aware that there are lots of other potential buyers waiting in the wings, so they’re less likely to get any ideas about gazundering.”
3. Be upfront about any problems
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It’s one thing knowing how to make your house look expensive from the outside but the inside also needs to hold up too. A common problem when people sell their homes is that they become reluctant to share issues about the house out of fear it will ward off buyers.
Mark warns against this, saying: “As mentioned before, another thing a seller can do to reduce the risk is to give as much information about their property and its condition to the agents when they list it.”
By providing as much detail as possible, good, bad and ugly, you’re less likely to be faced with a gazundering issue down the line. Mark explains, “Most agents will use this to produce a property information form for buyers so that every detail about the property is clear from the outset.” That way there are no nasty surprises for you as the seller and them as the buyer.
4. Move quickly
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This is probably the easiest step to stick to, as most people would rather not hang around when it comes to selling their homes however it truly is important to act fast when possible during the selling process.
“Keep in regular contact with your solicitor to ensure they are pushing on with your case,” explains the Martin & Co. experts. “Meanwhile, your estate agent should be responsible for checking in with the buyer’s solicitor and making sure everything is running smoothly on that side of the sale.”
5. Build a relationship with the buyer
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Although it might seem somewhat strange to become friendly with a stranger, there is an advantage to building a good relationship with the buyer of your home from the outset. Director at estate agents Gascoines, Luke Saywell, explains how this is a great way of avoiding being gazundered.
“Make sure to build a good relationship between the buyer and the seller from the start of the sale. This means that there’s an open flow of communication and can help both parties gauge each other’s commitment as well as working through any challenges that arise,” he says. By keeping that communication open you’re less likely to run into any surprises further down the line.
Having worked at Gascoines for over 10 years, Luke has accrued first-hand experience in the property industry. Now the director and partner of his family-run business he continues to manage multiple estate agent offices across the south of England.
What to do if you’ve been gazundered?
If you ever find yourself having been gazundered there is not much you can do, other than attempt a renegotiation. The Martin & Co. property experts say it’s a good idea to consider the lowest price you’d accept for your home, this way if you do get gazundered then you already know where you stand and may end up deciding to accept their offer outright.
On the other hand, they say, “If you decide to refuse the reduced offer, calling the buyer’s bluff by putting your home back on the market right away can be a good move. Remember, if you’ve managed to find a buyer before, you will find another.”
Although it may be frustrating having to put your home back on the market, it’s better to try again than settle for a price you aren’t happy with.
Of course, the last option is to negotiate with the buyer and try to reach a price you’re both happy with. A compromise may be the other way if property prices are falling or if their survey has revealed some issues that you hadn’t declared before.
No matter how many steps you take to prevent being gazundered it may still happen, which is why whatever course of action you decide to take we recommend you consult with a property expert before making any decisions. It’s better to go into the selling of your home with all the information you need and be prepared for anything that might come your way.
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