12 Jun, 2018/ by Homeward Legal /Sale & Purchase
Asking prices for property in the UK have hit record highs recently. But data suggests that many sellers are accepting much less to sell their property once their home goes on the market.
Recent data from the Cities House Price Index compiled by Hometrack said sellers were being more realistic about the price they could achieve and more willing to offer bigger discounts to complete a deal.
This price adjustment is obviously a matter of negotiation between buyer and seller.
But there is an unwelcome part of the property market for sellers where they are at the mercy of a buyer - and that is the tactic known as gazundering.
Tactic is to lower offer at last minute
Gazundering is where a buyer reduces their offer, often by thousands of pounds, at the very last minute, usually at the point where contracts are ready to be exchanged. This puts the seller, who may have already committed to buying another property, under pressure to accept the lower price to ensure their sale and purchase actually goes through.
While there is nothing illegal about gazundering - and negotiation should always be part of the process of buying a property - the last-minute nature of this tactic is questionable at best.
Seller needs fallback options
There is no obvious way to combat the threat of gazundering, either. The best way to ensure your buyer sticks to the agreed price is to have other potential buyers waiting in the wings.
Often if a sale goes to a closing date, you as the seller will have a number of bids to choose from. The buyer making the successful offer will also be aware that others have made offers, too, and the possibility of competition or of being gazumped - another tactic that sees the seller accept a higher offer before completing on the first offer - is likely to keep the buyer focused on completing the purchase as quickly as possible.
Location of property can be key
The likelihood of a seller being the victim of gazundering depends very much on the location of the property. For example, in London, some estate agents have reported the tactic is very much on the rise because of the capital's sky-high prices. Buyers are calculating that they can force a seller to accept a lower price just to ensure a sale.
Both buyers and sellers need to have the best legal advice and representation when entering into a property transaction. At Homeward Legal, we work with the best specialist conveyancing solicitors in England and Wales.
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