Stop buyers from gazundering you
If you want to stop buyers from gazundering you - where the buyer reduces his or her original offer before exchange of contracts - then you've come to the right place.
Unfortunately, gazundering is legal in England and Wales (Scotland operates an entirely different system). Many of us think it's unethical, but the fact remains, a buyer can go into a purchase planning to gazunder a seller once he or she has taken the property off the market and is in a weaker position.
It is up to individuals to decide whether their honour is worth more than the price they pay for the property.
Here's how to protect yourself from unscrupulous buyers:
1) Set a realistic asking price.
The less time it takes you to get an offer, the less desperate you will be to sell at any price. Be aware that some buyers will check how long the property has been on the market and whether it has been reduced in price, and will use this information to try to negotiate a further discount. Read our guide to setting a realistic asking price.
2) Figure out your absolute lowest price.
Ask yourself what your property is worth to you: i.e. your absolute lowest price. If this is all you can get from a buyer, make it clear from the start that you will not drop the price in the future no matter what happens.
3) Be prepared. Make sure your solicitor has all the legal documents the potenital buyer will need before you even get an offer. Dig out any relevant certificates, e.g for damp-proofing or double-glazing. Copy keys for the estate agent and surveyor. Get your HIP sorted. Consider renting if that frees you from a chain.
4) Opt for a chained buyer if you can. A buyer who is in the middle of a property chain is less likely to mess you around, knowing that he or she has to be out of their own home by a set date, or they will lose the sale of their own property. Ideally, you want a chained buyer who already has a mortgage offer in place and so can move relatively fast. Always ask your estate agent to find out these vital facts before they put an offer to you.
5) Remember, you're not safe...
...until exchange. So incentivise the buyer to speed up the housebuying process. For example, you could accept the offer only on the condition that the buyer gets a survey done within 10 working days, and refuse to stop showing the property until the survey has been completed. Or, if you're particularly ruthless, you could warn the buyer you're going to keep it on the open market until the contracts have been exchanged. That will ensure you haven't lost any time if the buyer does decide to gazunder at a later date.
6) Be friendly, but not too friendly. If you can develop some sort of personal relationship with the buyer, it will be harder for them, emotionally, to go back on their word. But don't reveal any facts which might make them think you are desperate to move. For example, if you are pregnant, an unscrupulous buyer is likely to guess you want to be out of the property before you give birth, and could take advantage of that fact.
Help for gazundered sellers
If you do get gazundered, despite following these tips, don't despair. There are ways you can fight back.
1) Don't panic
If you panic, you may make statements which you do not mean or are incorrect. State that you want evidence of their reasons for reducing the offer (e.g a similar property has fallen in price, or the survey revealed a hidden problem) and wait for them to prove it to you.
2) Research the market
Do the same research that the buyers would have done. Check prices in the area and ask builders for a free quote, so that you can assess your position fully.
3) Get the buyer's documentation
Wait until after you have received the buyer's documentation and your own, and are ready to exchange contracts, before you make a final decision on whether or not to accept the offer. If you can see the buyer's side of the story, try and be reasonable. Maybe you could make a counter-offer which you think is fair. There are two sides to negotiating!
4) Consider your costs
Steps 1 to 3 should help you to see where your buyer is coming from. If your conclusion is that their expectations are completely unrealistic and unreasonable, consider the chances that the same thing might happen again with another buyer and the costs you would lose on this sale.
Ask yourself: Which is more important to you, the sale or the money? With the facts on your side, you should find you are able to live with whatever decision you make.
Get advice from other lovemoney.com readers
If you've been gazundered, why not ask for tips and advice from other lovemoney.com readers using our Q&A tool? Or add a tip of your own to the comments box below!
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