The term gazundering can send a shiver down the spine of any seller looking to complete the sale of their home.
Jonathan Detheridge, Head of Granger & Oaks, Nottingham, explains what this term means and its potential impact on the selling process
Gazundering is a term for a modern phenomenon that refers to the action of a buyer who lowers their offer on a previously agreed sale price, just prior to the contract being signed. In some cases this isn’t through the buyer’s choice – they could be reacting to an event in the chain, or findings in the survey.
At a time of low buyer demand or when a sale simply has to complete – for example, if there is a long chain or time is of the essence – then a seller may be forced to accept the lower price or risk the collapse of the entire chain. Such behaviour can trigger a chain reaction because a seller who has been forced into a corner with a lower price may then look to reduce their offer on a potential acquisition.
Here estate agent Jonathan Detheridge reveals what can be done to mitigate the effect of gazundering and all that it entails.
Set the exchange date for contracts – expedite the deal to try to overcome any doubt or change of mind by the buyer.
Push your buyer to have their survey completed quickly – sometimes lenders have large backlogs, so if a sale is chain critical, this may mean that they need to change the lender they were planning to use.
Be realistic – do not be overoptimistic about your sale price and be wary of a buyer whose story doesn’t stack-up. Don’t get caught out by the buyer who offers over the asking price to secure a sale, who may then start chipping down the price as the exchange date looms. In most instances a buyer will also be relying on a lender’s survey and they may down-value the property if they feel it is over-priced.
Be transparent – ensure that there are no shocks in the buyer’s survey because any large repairs can scare a buyer or provide them with the opportunity to significantly lower their offer. Ask your estate agent to take a look around your house to see if they spot any problems that a surveyor may pick up, and get them repaired before you put your house on the market.
Choose your estate agent carefully – a well trained and reputable estate agent will do all they can to ensure that the sale goes through and will be familiar with aggressive behaviour from buyers. They will be the experts that manage the process.
Prevent delays – hold ups between the solicitors of both parties can give the buyer wriggle room to change their offer. Ensure that you have promptly provided all the information that your solicitor needs and that it gets to your buyer ASAP!
Thankfully gazundering is rare, and in most instances buyers do not do it vindictively, but whatever the scenario it can be distressing and can often see deals collapse. Mr Detheridge recommends that vendors always try and pre-empt the survey and either have work done prior to listing, or, if you’re selling a property at a reduced price because it requires work, be upfront about it. Favourites for surveyors to pick up on are things such as damp proofing, chimney pointing and wiring. Always try and get the survey done quickly so you can head-off anything that is raised.
To understand more terms around buying, selling and renting, visit the OnTheMarket jargon buster.
