November 5th 2023.
Many sellers are seeing the distress caused by gazundering, a tactic where buyers reduce their offer at a late stage of negotiations to pressure the seller into accepting less money. Katharine Storr, 38, was one of those sellers.
The day before she was due to exchange contracts, the people buying her family home slashed their offer by £30,000. “They were bringing up all kinds of things which were in the survey, but weren’t issues at all,” she said. “They had us over a barrel and knew it as we have three children and were moving house for schools.”
According to research by House Buyer Bureau, 31% of UK home sellers over the last six months have fallen victim to gazundering, with a third saying it happened within a week of their exchange date. Katharine and her husband Matt were “upset and angry” over the last-minute reduction. Three quarters of sellers who’ve been gazundered reported that they also gave into the pressure and accepted, for reasons including believing the lower offer was still fair, not wanting to jeopardise their onward sale, and not wanting to waste more time finding another buyer.
Evie Richards, 25, experienced a similar situation after putting her house on the market in February. After accepting an offer that was already £20,000 below asking, the buyer then asked for £30,000 less before exchange. Evie, a deputy SEO editor from South London, was informed that buyers sometimes put offers on multiple houses to try their luck and see what they can get cheapest.
The economic downturn has created a buyer’s market, which likely encouraged the buyer of Maria Bailey’s Torbay home to drop his initial offer by £60,000 late last year. Maria described the buyer as “one of life’s chancers”, and immediately declined the offer. However, he later got back in touch, offering full asking price and saying it was his dream home.
Gazundering can be a distressing experience for sellers, and the current property market puts buyers in a position of strength. Analysis by GetAgent found that Google search popularity for the term gazundering has risen 97% since January, while property sales are down 17% compared to last year and have reached seasonal lows not seen since 2014.
Unfortunately, there are no restrictions on gazundering in the UK, leaving sellers vulnerable to late-stage reductions. Moving house is already considered to be one of the most stressful events in our lives, and many sellers find themselves backed into a corner, accepting less money than they hoped. Whether it's a last minute drop in price, or a buyer withdrawing an offer altogether, it’s always a nerve-wracking ordeal.
Many sellers are seeing offers slashed right before exchange - a phenomenon known as 'gazundering'. Katharine Storr, a 38-year-old mum from Tooting, experienced this first-hand when the people buying her family home reduced their offer by £30,000 the day before exchange. Feeling pressure to move house for their children's schools, Katharine and her husband Matt found themselves with no other option but to accept the offer.
Research conducted by House Buyer Bureau shows that 31% of UK home sellers have experienced gazundering in the last six months, with a third reporting it happening within a week of their exchange date. Moving house is already considered to be one of the most stressful events in life, and gazundering adds an extra layer of strain to the process.
For Evie Richards, a 25-year-old deputy SEO editor from South London, her experience of gazundering was post-offer. After putting the property she shared with her ex on the market in February and accepting an offer in June, the buyer tried to reduce the offer by £30,000 in September - leaving Evie feeling 'terrified' that the buyer would pull out. After a lot of negotiation, the buyer eventually agreed to offer £7,000 less than the original amount, along with additional amenities.
The current property market - with buyer demand low and sales down 17% compared to last year - has created a buyer’s market, where gazundering has become a less risky option. Maria Bailey, a 47-year-old director of community interest company Grief Specialists, found herself in a similar situation last year when the buyer of her Torbay home dropped his initial offer by £60,000. Maria declined and took another offer, but the gazunderer later got back in touch, seemingly regretting his decision.
Gazundering puts extra strain on the already stressful process of moving house. With the current economic climate, it is likely that this phenomenon will become more frequent - putting sellers at an even greater disadvantage.
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