If you’re selling your property and have had an offer accepted, it’s a done deal, right? Sadly, this isn’t always the case, because buyers can take advantage of a tactic called gazundering. But what is gazundering? We get into all your frequently asked questions about this very tricky scenario in our guide below.
FAQs
Gazundering meaning: What is gazundering?
Gazundering is when a buyer has their offer accepted on a property, but then drops to a lower offer before the contracts are due to be signed and exchanged.
While gazundering can be done for legitimate reasons, it’s a tactic usually used by buyers for personal gain. They want to force the property owner into accepting a lower sale price rather than start the whole process again.
Is gazundering illegal?
Gazundering is not illegal in the UK. Buyers are not legally bound to an offer until the contracts are signed and exchanged. This means that they are free to change their offer at any time up to this point.
Is gazundering fair?
Gazundering can be done fairly, and for legitimate reasons. For example, a buyer might make an offer, and then find out through survey work that there is a significant problem with the property. They may then feel justified in dropping their offer to reflect this new reality.
How often does gazundering happen in the UK?
There are no firm figures for how often gazundering happens in the UK. This is because it isn’t a crime, so it isn’t reported to the police or other authorities. However, a recent survey by the HomeOwners Alliance reported that gazundering is becoming a serious concern in parts of Britain.
The report found that 45% of homeowners are worried about gazundering. This number rises to 50% in London, the Midlands and Southeast England.
Do estate agents allow gazundering?
Estate agents do allow gazundering, because they are legally obliged to tell the property owner about all offers they receive. While some estate agents have policies that discourage gazundering, they have no legal authority to stop buyers from doing it.
Is gazundering the same thing as gazumping?
Gazundering is not the same thing as gazumping; it’s practically the opposite. Gazumping is when a buyer has their accepted offer outbid by someone else. We have a full FAQ article on gazumping if you want to know more about this practice.
What factors can lead to gazundering?
There are many reasons why a potential buyer may decide to lower their offer after having an original offer accepted. The personal circumstances of the buyer may change, or interest rates could rise, meaning they can no longer afford a mortgage of the size required to pay the previously agreed price.
Buyers could also discover details that reduce the potential value of the property during the conveyancing stage of the transaction. These could include issues highlighted on the property survey or items flagged in the property searches that could result in extra work or spending on the property in the future. Buyers could also gazunder their offer as a simple negotiation tactic, to try and get the best deal possible on their property purchase.
Can I accept multiple offers when selling a house?
Until contracts are exchanged, as the property owner you are free to accept an offer but still consider others. If you are being gazundered, you could accept the offer but then accept a higher offer from someone else later.
What should I do if my buyer has gazundered their original offer?
If the original offer you accepted has been gazundered by the buyer, you might decide to enter negotiations with them to see if you can reach a price you both agree on. You may also decide to start accepting viewings of the property again in the hope of attracting a new buyer who’s willing to meet the originally agreed price, or who could prompt a bidding battle with the original buyer.
How can I avoid gazundering?
The best way to avoid gazundering is to try and complete the sale as quickly as possible. This gives buyers less of a chance to plan a gazundering offer. The quicker you move, the more likely you can secure the sale successfully.
Another tip is to make sure you are as upfront and honest about your property as possible. Don’t try to hide or downplay any issues that might encourage a buyer to gazunder you later.
Finally, do everything you can to make your property an attractive sales prospect. Then you’re more likely to receive multiple offers. This way, you won’t be backed into a corner and under pressure to accept a gazundering offer.
What can I do to counter a gazundering?
If you’ve been gazundered, the first thing you might try is to make a counter-proposal somewhere between the buyer’s original offer and their gazunder offer. If you can reach a satisfactory compromise, it can end well for both parties.
However, the best way to counter gazundering is to minimise the threat in the first place. Work with an experienced solicitor, find a trustworthy estate agent and make sure your asking price isn’t unrealistic. Once you’ve accepted an offer, set the wheels in motion as soon as possible, and remove any obstacles that could draw out the completion of the sale and lead to the buyer getting cold feet.
Is gazundering more likely in a buyer’s market?
In 2023, rising interest rates have seen the UK property market stagnate, and it appears to be switching from a seller’s market to a buyer’s market. With fewer buyers able to afford the rising mortgage rates, those who are still in the market have a lot more choice, and they can drive a harder bargain with sellers. As such, a buyer’s market probably makes gazundering more likely, as buyers try to extract the best possible deal from sellers who are left with fewer options.
While there is a lot of technical jargon around buying property, you can help make things easier for yourself. Check out our guides on contracts and offers, and the meaning of freehold vs leasehold. This should help familiarise you with the process before you jump in.
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