More and more people are becoming interested in or affected by this practice
The term ‘gazundering’ has been making waves in the property sector, with a 97% increase in Google search activity since the start of 2023. According to research, the rise in gazundering-related searches aligns with the current shift in power towards homebuyers.
This significant surge suggests that more and more people are becoming interested in or affected by this practice. So, what exactly is gazundering? Gazundering occurs when a potential homebuyer lowers their initial offer just before contracts are about to be exchanged. This can put sellers in a difficult position, as they are left to decide whether to accept the lower offer or risk losing the sale entirely.
Gazundering is often used as a tactic by buyers when market conditions are cooling, giving them more leverage in negotiations. In an environment of tepid buyer demand or when a sale must be wrapped up swiftly – for instance, in a lengthy chain or when time is of the essence – a seller might find themselves compelled to accept this lower bid. This risks triggering the collapse of the entire sales chain. In these situations, a pressured seller may also reduce their offer on a new purchase, creating a domino effect.
Navigating gazundering
Remember, while gazundering can be a stressful experience, understanding what it is and how it works can equip you with the knowledge to navigate it successfully. A recent survey of home sellers found that one in five sellers have been gazundered when selling their home. So, what strategies can one employ to navigate gazundering?
Here are some you might consider:
Setting contract exchange dates swiftly
One approach is to set a date for the exchange of contracts promptly. This can deter late cold feet or changes of heart from the buyer.
Realistic pricing and openness
If you position your property price too high, you risk buyers reducing their offers later in the process. This doesn’t mean undervaluing it. Instead, it means setting a price that reflects its true market value, considering factors such as location, property size, condition and comparable real estate prices in your area. Doing so will attract serious buyers and stand a better chance of securing a sale that satisfies all parties involved.
Encouraging timely surveys
Encourage your buyer to complete their property survey without delay. Lenders can sometimes be swamped with work, which could slow down the process if your sale depends on a chain. In these circumstances, the buyer may need to think about switching lenders.
Selecting the right estate agent and minimising delays
Ensure no nasty surprises are lurking in the buyer’s survey. Significant repair work can frighten buyers or give them a reason to reduce their offer significantly. Having your estate agent inspect your home for potential issues that a surveyor might highlight could be advantageous. A trustworthy and well-trained agent will do all within their power to guarantee a smooth sale and manage any aggressive behaviour from buyers.
Avoid unnecessary solicitor delays
Procrastination between both parties’ solicitors can allow the buyer to revise their offer. Make sure you have promptly supplied all the necessary information to your solicitor.
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If you need further clarification or have any questions about gazundering, don’t hesitate to get in touch. We’re here to assist you throughout every stage of your home-selling journey and mortgage requirements. Contact our team here.
Please note: a mortgage is secured against your home or property. Your home or property may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.
