19 October 2018
In a buyers’ market, property sellers can find themselves falling prey to unscrupulous buyers who drop their offer price just before exchange and threaten to pull out of the sale if their demands are not met. This practice, known as gazundering, can turn a straightforward sale into a nightmare of negotiation and re-negotiation.
Of course, the vast majority of people do not act maliciously. However, there are many legitimate reasons for gazundering, including late revelations about work that needs to be done, low valuations which affect mortgage offers, and lease issues. These, and any number of other problems, can force the hand of even the most well intentioned buyers.
The reality is that if you are in a hurry to sell a property, the threat of gazundering can be a very real worry. Here are several precautions you can take to minimise the risk.
You might think that a high offer from a keen buyer is a good start to the selling process, but be aware that both you and the buyer might be in for a shock if the property was over-valued initially.
Any hidden issues will come to light during the survey, and the mortgage company is unlikely to be charmed by the unique features your buyer fell in love with. If the asking price is too high then the chances of the buyer dropping their offer later is increased.
Before accepting an offer, find out what you can about your potential buyer. Check via your agent that they have funds or a mortgage offer in place, and try to find out why they are buying. If they have an emotional attachment to the house or area and have put work into researching the move and finding schools or local jobs, then they are unlikely to risk losing the sale at a late stage.
A chain can complicate the buying and selling process but it is often unavoidable. If you find yourself in a chain, ask your agent to tell you whatever they can about the other properties involved. A too-short lease, unmortgageable property, family conflict, or any other issue which affects one person in a chain can cause unexpected delays and costs for everyone.
Property purchases can take months and serious buyers will be just as keen as you are to get through the process. The longer the sale takes, the more time the buyer has for second thoughts. If you set an exchange date early, reply to queries promptly, and keep the sale moving then you’ll have a good chance of reaching completion quickly.
A chain-free buyer is likely to have a more secure financial position, with less chance of additional last-minute costs (which they might try to pass on to you), than one who is relying on their own house sale.
A cash buyer is even better, but many sellers are wary of professional investors who need to secure a property at the best price possible.NAPB members are signed up toThe Property Ombudsman Code of Practice and cannot reduce their offer late in the buying process without a valid reason, which must be explained to the seller.
Article provided by one of The National Association of Property Buyers founding members Speed Property Buyers. Written by Jeff Djevdet.
This content has been provided to us by the writer. Whilst believed to be factually correct, we cannot accept responsibility for content contained within it.