Gazundering – what it is and how to avoid it
When a buyer has their offer accepted, but lowers it before the sale is completed, it is called gazundering. It’s a rotten practice and unfair to the seller but, unfortunately, gazundering is perfectly legal.
In this blog, I look at why gazundering happens and what you can do to avoid it.
Why does gazundering happen?
I’m going to start with the worst reason (let’s get it out of the way!). Some people are just out for what they can get. They never had any intention of honouring their original offer and they don’t care that they’re leaving the sellers out of pocket. As an experienced estate agent, I can usually spot these characters and will do all I can to manage the situation so you don’t get gazundered with no good reason.
Fortunately, society has not completely broken down and most gazundering isn’t caused by buyers behaving badly. In truth, most gazunderers are perfectly nice people who have been forced by common house-buying obstacles to lower their offers.
The most common reason is the survey. If the survey reveals any problems with the house, the buyer would be justified in saying that the house is worth less than they thought, and lower their offer.
Another common reason is problems in a chain. Your buyer may well be a seller too. If they get gazundered themselves, or don’t receive as high an offer for their old home as they expected, they could be forced to lower the offer they make for your property.
How can sellers avoid being gazundered?
The most obvious answer is to take back power from the buyer and not accept the lower offer. However, very few sellers have that freedom so instead, it’s best to prepare for the sale thoroughly so gazundering doesn’t happen in the first place. Here’s how:
1. Be honest
If you know, for example, there’s a bucket catching rainwater in the loft, either get the roof repaired or tell your estate agent before they value the property. This way, there won’t be any nasty surprises for the buyers and they won’t feel compelled to lower their offer.
2. Choose accurate pricing
I believe in accurate valuations. By putting the property on the market at the right price, you reduce the risk of someone trying to offer you less than the property is worth. An over-priced property is much more vulnerable to gazundering – enthusiastic buyers who made a good offer may lower it after the initial excitement has worn off and they’ve seen what prices other properties in the area fetch.
3. Avoid chains
This can be difficult to avoid, but if you have a choice between a buyer in a chain and one who isn’t, choose the one who isn’t. That way, you’re not vulnerable to the vagaries of the other parties in the chain. If the person at the bottom of the chain gets gazundered, everyone else in the chain will have to lower their offers…well, the results are obvious.
4. Choose the right estate agent
Find an experienced estate agent (like me!) who knows the local property market and can price your property accurately. A good estate agent will also be able to spot the chancers and manage property sales so sellers don’t fall prey to gazunderers.
Sell property in East London
If you’re selling property in East London, I hope you’ll consider selling through Dockleys. I can answer all your questions and help you avoid the pitfalls. Give me, Adam Dockley, a call today on 020 3633 4440 – looking forward to hearing from you.
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