How Can You Protect Yourself from Gazundering When Selling Your Home?
When you’re selling a property, there’s always a risk that you’ll be gazundered. This can cause problems for your own property sale and also any further property sales in the chain after you. But what is gazundering and why could it cause you a problem when selling your home?
What is Gazundering?
Gazundering is when a buyer makes an initial offer and then reduces it later on in the buying process, usually just before contracts are exchanged.
Gazundering is the opposite of gazumping, when a seller has initially accepted an offer from a buyer but then accepts a higher offer from another buyer. Whilst gazumping can cause problems for the original buyer, gazundering will cause an issue for the seller.
Why do People Gazunder?
People might gazunder for all sorts of reasons. Sometimes a buyer might gazunder because property prices are falling, or they have seen similar houses for less money. They might gazunder if they initially made an offer for more than the house is worth and they are now struggling to get a mortgage for that amount.
A buyer might gazunder if their financial situation has changed, and they can no longer afford the original offer. A buyer might also be forced to gazunder if they have been gazundered in their own property sale, so will now have less money to spend on their purchase.
Why is Gazundering a Problem?
Gazundering can put the seller in a very difficult position. They will either have to accept the lower offer or refuse and start the entire selling process again. If they choose to reject the offer, they will have wasted money on fees and wasted time on a sale that hasn’t gone through.
The same will also be true for buyers who attempt to gazunder and have the lower off rejected. They will have to start house-hunting again and will have wasted time and money on estate agents and legal fees.
Gazundering can also cause a major problem if the property sale is part of a chain. If the seller rejects the lower offer and has to start again, it could mean they are not able to buy a property they were planning on purchasing. This could cause the sale to fall through, and so on for all the sales in the chain.
Is Gazundering Legal?
In England, Wales, and Northern Ireland, gazundering is completely legal. The sale will not be legally binding until the contracts have been exchanged – so it’s legal for a buyer to change their offer any time up to this point.
The property buying process is slightly different in Scotland. There, the sale is legally binding as soon as an offer is accepted. If the buyer then attempts to make a lower offer or wants to back out because they can’t afford the original offer, they will lose their deposit.
How Can You Avoid Gazundering?
There’s no certain way to avoid being gazundered. As a seller, you are allowed to reject a lower offer if a buyer attempt to gazunder, but as we’ve already mentioned, this will mean you have to start the property selling process from scratch.
However, there are some steps you can take to reduce the risk of being gazundered:
Choose the Right Buyer
If you have multiple offers on your property, you shouldn’t necessarily go for the highest offer. You should try to do some research on the buyers to find one that is more likely to stick to their offer and carry the sale through to the end.
If possible, choose a buyer who is not part of a property chain. A buyer who is not also trying to sell their own property is less likely to need to drop out of a sale or lower their original offer, as they won’t be dependent on the result of their sale.
You should also aim to choose a buyer who has had a mortgage in principle secured. This will mean that they are more likely to get the mortgage they need to buy your property at their original offer and will not need to lower the offer if they can’t get the mortgage.
Be Realistic About Your Asking Price
You should make sure to be realistic about how much your property is worth. Whilst everyone wants to get the highest possible price, if you value your home too high, you are more likely to be at risk of being gazundered.
SOLD.CO.UK never over-value or over-promise when it comes to your property price. You can use our free online house valuation tool to get an idea of how much your house is worth and then speak to our property experts to share more information about your property for a more specific value.
Be Upfront About Your Property
You should make sure you’re upfront about everything with your property from the get-go. If there is anything structurally wrong with your property, it will always be highlighted in the property surveys – so you can avoid gazundering by making sure the buyer is aware of any issues before they make their first offer. This will reduce the risk of them lowering it down the line when any issues are made known to them through the surveys.
You’ll want to complete the sale as quickly as possible to reduce the risk of being gazundered. You should be proactive and make sure you always have information and property details at hand so you can answer any questions during the conveyancing process.
You should make sure to keep in contact with both your estate agent and the conveyancer or solicitor so you can make sure things are moving forwards quickly.
Find A Good Property Agent
The best way to ensure the property sale is completed quickly is to work with an expert estate agent, like SOLD.CO.UK. Unlike traditional estate agents, we can sell your home fast, in as little as 30 days. Our professional team will always be on hand to ensure the conveyancing process moves quickly and efficiently, reducing the risk of a buyer getting cold feet and making a lower offer.
Contact us today to find out how we can help you sell your home.