What is Gazundering?
Gazundering is the term used when a buyer agrees to a price on a home and then backs out just before contracts are exchanged. The English law states that the price the buyer and seller agrees on isn't definite until they have exchanged contracts. The buyer or seller can pull out or reduce/increase the price of the property.
Gazundering is an all-too-common behavior that has become prevalent in the UK market. Although gazundering is legal, it's deemed as an unethical practice.
The opposite of gazundering is gazumping. That's when a seller pulls out and demands a higher price. Gazumping tends to be more frequent in a seller's market. With home values on the rise throughout the UK, we could see a shift from gazundering to gazumping in the near future.
Gazundering becomes more problematic if you have an urgent need to sell the home. Even renegotiating the price could add a week or two to the sales process. If you're in financial trouble and are facing repossession, the gazundering could cause you to miss the deadline to sell the home. If you have an offer on another home, the gazundering could cause your subsequent purchase to fall apart.
How can I prevent gazundering?
Without the benefit of time, it's difficult to protect yourself from gazundering once it's already happened. You may have little choice but to accept the reduced offer to keep the deal on track. However, you can take steps earlier in the process to reduce the possibility of gazundering taking place.
- Negotiate the sales price. If you accept the first offer straightaway, the buyer may think there's more room for negotiation later. You can discourage that thinking by being a tough negotiator upfront.
- Set deadlines for the survey and exchange of contracts. You can put these clauses into the sale contract. The less time the buyer has to consider the deal, the less likely they are to back out when it comes time to completion.
- Make sure the buyer has all needed information. Disclose everything upfront. Buyers will often use the discovery of new information to ask for a reduction.
If you have found yourself in this situation and your buyer has pulled out, selling your house fast might be the best option for you. Fast Sale Today will buy any house for cash, no matter the condition within 28 days. We operate a fair and transparent process and once a price has been agreed we won't renegotiate. Contact us today for more information on how we can help you.