You have probably heard that selling a property is one of the most stressful things you will do in your life. And the risk of gazundering can make it even more challenging.
The practice of gazundering, when a buyer lowers their offer after the seller has accepted it, is frowned upon. But that doesn’t stop buyers from using it.
As a seller, it can be worrying, especially if you rely on the amount to purchase your next dream home. So is there something you, as a seller, can do?
Yes, there is. In this article we will tell you how to protect against gazundering as a seller and how to deal with it if it happens anyway.
Selling A Property? FREE Step-By-Step Platform
- Bite-sized steps for buying and/or selling a property in the UK
- Easy-to-follow explanations every step of the way
- Clear actions to follow to progress your property transaction
- Trackable progress so you know what to do next
- Detailed informative articles related to every step you follow
Steps To Take To Protect Against Gazundering As A Seller
As with most things, prevention is better than cure and there are some steps you can take as a seller to help reduce the chance of gazundering happening to you. Here’s some to consider:
Be Realistic On The Sales Price
One of the most common reasons for gazundering is that the initial agreed sales price was too high.
Buying a property can be quite emotional, and it’s easy for buyers to get carried away in the heat of the moment and offer to pay too much for a home, especially if a bidding war commences.
Be realistic about the sale price you set and try to be sure that the buyer is serious. Encourage them to have multiple viewings of your home before you agree on a price, so you can be sure they are not acting on a whim.
We had to do this on our most recent sale, reducing our asking price by 5% after a few months without any firm offers. We made the new price ‘offers over’ but still received an offer slightly below this amount.
We could have pushed for the buyer to increase their offer, but by then we simply wanted to sell and get moving, so we didn’t want to increase the chances they would just gazunder us later.
By accepting the lower price, we could always fall back on the fact we had accepted a lower price than we wanted and therefore weren’t prepared to reduce it further.
Be Honest About Any Issues
If you know there is damp in the back bedroom or signs of movement in the kitchen, be up-front and honest about them.
Issues like this are sure to be picked up on a survey, so hiding them only delays confronting the problem.
Telling your buyer about such problems before they make an offer significantly reduces the chances they will reduce their offer later.
We always make sure to fix as many problems as we can before we list a property which helps to avoid this issue. However, if there are issues we cannot or don’t want to fix, we are honest about them during the viewing.
Of course, it’s a careful balancing act between not drawing attention to negatives and being honest, so you have to be careful.
In our case, there was a large crack in our retaining wall that was very visible (despite a previous repair). We knew it was just cosmetic as we had had a structural survey conducted when we bought the property, however, we were aware some people may try and use it to gazunder us later.
So, if anyone appeared to notice the crack, we would simply say “we had a structural survey done when we bought and that crack is just cosmetic, we are happy to share the report with you.”
This was actually a way for us to turn a potential negative into a positive (a structural survey is great reassurance for buyers) while also protecting us from gazundering.
Offer To Pay To Resolve Problems
If your buyers’ survey has picked up on some work that needs carrying out, offer to pay to get the work rectified before the sale completes.
This will often work out cheaper than accepting a lower offer from the buyer and will also help you build up trust with your buyer.
It’s worth doing the work as, even if the sale still falls through, it’s one less potential problem you’ll have to worry about the next time you find a buyer!
We had to do this on our last sale. The buyer’s survey had identified a damp issue that even we had not been aware of. It wasn’t a major issue but would cost around £500 to fix.
Our buyer discussed the repair with us and the impact on their offer, but we were able to avoid being gazundered by offering him some garden equipment we were looking to sell anyway. He accepted this offer.
While we missed out on the cash we would have got for selling the equipment, it meant our transaction could proceed without a hitch and we at least didn’t have the hassle of trying to sell the equipment!
Find A Chain-Free Buyer
Of course, you can’t always pick and choose your buyers but, if given the choice, a buyer not in a chain is always more preferable than one who is relying on selling their own property first.
That’s because your own sale can be affected by events happening further down the chain. For example, if your buyer is gazundered on their own property, they might respond by reducing their offer on your property.
When we sold our first property, we were lucky enough to sell to a chain-free, cash buyer. This meant they were a pretty secure buyer and even decided against having a survey done!
Of course, finding such a buyer isn’t easy, and we’re not saying you should specifically look for one like this. However, when you do get one, you might be willing to consider a lower offer from them just because you can be more confident that gazundering won’t happen (though don’t rule it out!).
Become Chain-Free Yourself
Just as gazundering can occur because of events further down the chain if you are in a chain yourself this could also impact your chances of getting through without being gazundered.
That’s because chains can and do cause delays in the process. Every time there is a delay that isn’t your buyer’s fault, it increases the chances of them reducing their offer or pulling out altogether.
You can always move items into storage and rent for a while to remove yourself from the chain.
Don’t Delay The Process
Anything you can do to speed up the process and get to the exchange of contracts faster will help you avoid being gazundered.
We’ve already mentioned becoming chain-free, but it’s also worth ensuring all your paperwork is in order and that you’re ready to proceed as quickly as possible.
Appointing a good solicitor will also help you avoid any unnecessary delays.
We have always made a point of finding the solicitor we want to use as soon as our house is on the market. That way, we can tell potential buyers we have a solicitor ready to go – helping to show we’re serious and won’t hold things up.
Build Up Rapport With The Buyers
If you can, exchange contact details with your buyers. Many high street agents discourage this, yet by being able to contact each other directly you don’t have to wait for the estate agents office to open to pass messages through a middleman.
Most online estate agents allow you to deal with your buyer directly, thus cutting down communication time and helping you keep things on track.
This was one of the biggest advantages we found when we used an online estate agent to sell our home. Being able to communicate with our buyers directly saved a lot of time and helped us overcome problems before they became a major issue.
We actually dealt with our buyer through WhatsApp, and it came in really useful when his solicitor started holding things up. We were able to communicate directly with him and encourage him to put pressure on his solicitor to speed things up.
How To Deal With Gazundering As A Seller
While we would love to say that our guide on how to protect against gazundering as a seller will guarantee it won’t happen, that would be a lie. So, we don’t.
Instead, we also provide you with advice on how to deal with it if it does happen. First: don’t panic!
Sometimes there are genuine reasons as to why a buyer needs to lower their offer. In such cases, you may be able to make allowances depending on your financial position and desire to sell.
Whether you accept a lower offer may also depend on how quickly you feel you could find a replacement buyer.
In short, you have several options open to you:
1. Refuse Point-Blank
If you feel the buyer is simply trying it on, or the lower offer makes it impossible for you to continue the transaction from a financial point of view, refusing point-blank may be your only option.
Sometimes this will mean the buyer backtracks and agrees to proceed at the originally agreed price.
Sometimes you’ll lose the buyer altogether, particularly if it’s because they have seen another property they like.
Refusing point-blank is a risky strategy but can occasionally be the correct option.
2. Re-Negotiate The Price
Perhaps more common is to attempt to re-negotiate the price.
This can often be effective when the gazundering is happening because of an unfavourable survey.
You can perhaps negotiate the buyer back up to an acceptable price by agreeing to carry out repairs to some of the issues highlighted.
Remember that re-negotiating doesn’t always have to mean the agreed price. As we mentioned earlier, we were able to re-negotiate with our buyer to include some garden equipment in the sale that we planned on selling anyway.
So, think about what you have that might appeal to the buyer if you’d prefer to give them something instead of a price discount.
3. Accept With Conditions
If you decide you want to accept the lower offer, you are in a relatively strong position to make extra demands.
This could be along the lines of accepting the offer on the condition contracts are exchanged by a certain date.
This puts the buyer under pressure to get everything in order and the transaction complete.
Just remember, if the demand appears unreasonable you may still lose the buyer.
This kind of counter to gazundering usually works best when the cause of the reduced offer is a crashing market, and you want to complete before house prices fall further.
4. Accept Unconditionally
If you are just desperate to sell or concerned you won’t find another buyer, accepting unconditionally may be the best approach.
This takes away a lot of the risk attached to other options but may also leave you in the least profitable situation.
Accepting a lower offer without any conditions attached is usually best for when there are financial issues out of the buyer’s control.
Whatever approach you decide to take, try to first understand the buyer’s reason for lowering their offer.
Finding this out can often be half of the battle won as it gives you clues as to how best to deal with the situation.
How To Protect Against Gazundering As A Seller
It’s impossible to stop gazundering from happening, because it’s out of your control. However, there are things you can do to minimise the risk, including setting a realistic price, being upfront about any issues you are aware of and offering to pay for any issues a survey has brought up, if you are able.
And if it does happen, all is not lost. There are ways to deal with being gazundered without losing the buyer, such as accepting the lower offer but with conditions.
But sometimes, as a seller, accepting a lower offer just isn’t possible. You might not be able to afford your onward purchase if you agree to a lower selling price. And if you do lose your buyer at the later stage of the process, you will also lose money.
There is a way to minimise the risk of this as well: taking out home sellers’ protection insurance. While we have never used it ourselves, it’s worth thinking about it if you are worried about losing money if you were to be gazundered.
It can’t protect you from actually being gazundered, but it will cover some of the costs you had up to the point.
We have always found that following the advice we outline above works quite well, even if it’s no guarantee. But it’s up to you if you want to go a step further and take our insurance.
If you have more questions about this topic, head to our FAQ page about gazundering to find the answers.
