One-Third of UK Property Sales Hit by ‘Guzundering’

New research has revealed that almost a third of UK property sellers (31%) are being gazundered by their buyers, with many dropping their offer the week before exchange of contracts!

Gazundering is a practice in the property market where a buyer lowers their offer for a property just before contracts are exchanged. It can leave sellers in a difficult position, as they may feel pressured to accept the lower offer or risk losing the sale and potentially the entire chain of transactions. Gazundering is legal, but it is widely considered unethical and unfair to the seller, particularly if the buyer is taking advantage of a weaker negotiating position.

The survey of UK sellers who have sold a property in the last six months found that as many as 31 percent had experienced gazundering.

For half (51%) of those surveyed, the price drop happened more than two weeks before exchange. 15 per cent stated they were gazundered within two weeks of their exchange date, while 33 per cent said the buyer reduced their accepted offer within a week of their exchange date.

Out of those hit with a reduced offer, 75 per cent decided to press ahead with the transaction, accepting the lower offer. Of those that didn’t, 21 per cent stated that the sale fell through.

When asked why they decided to continue on with their original buyer and accept the reduced price, 25 per cent said that they believed the lower offer was still a fair one.

The second most common reason given (23%) was that they didn’t want to jeopardise their onward sale, while many sellers (19%) also didn’t want to waste more time finding another buyer.

When asked what the reason was for their buyer gazundering them, the most common reason given (in 25% of cases) was that there were issues found during the survey process, while 23 per cent said a down valuation in the survey was the cause.

However, nearly 20 per cent of sellers stated that they believed their buyer was just ‘chancing their arm’ in order to secure a discount.

Chris Hodgkinson, Managing Director of House Buyer Bureau, which conducted the research commented: “While this trend is being driven by opportunistic buyers to some extent, it’s important to note that in many cases, it’s due to issues found during the survey and the resulting down valuation. Therefore, while many sellers are being gazundered, they are proceeding on the basis that the secondary offer made is still a fair one.

 This is quite a natural occurrence in any market conditions and so buyers should be advised that, while there may be further room for negotiation after their offer is accepted, acting bullishly in order to lowball their seller could result in them losing out on their dream home.”

How to avoid being gazundered

Guzundering can put sellers in a very difficult position – leaving them short for their onward property purchase or in a position where they can’t fully pay off loans. For sellers keen to avoid being gazundered, here are some tips:

• Choose a chain-free buyer, if possible
• Set a date for exchange as soon as possible
• Move quickly by staying in touch with your solicitor and agent
• Be realistic about your price to reduce the chance of buyers lowering their offer
• Get a good estate agent who can handle buyers who are pushing their luck
• Don’t hide anything about the property or surrounding area
• Work out your finances and determine the lowest offer you could accept