Gazundering is the opposite of gazumping. It happens when a buyer reduces their offer shortly before exchange of contracts, effectively pressuring the seller into accepting a lower price. Because the sale is not legally binding until exchange in England and Wales, the buyer is within their rights to do this.
Gazundering typically occurs in a falling market where the buyer believes the property is now worth less than when they made the original offer. It can also happen if problems are revealed by a survey or if the buyer knows the seller is under pressure to sell quickly.
While gazundering is legal, it is widely considered poor practice and can collapse the entire property chain. Sellers faced with gazundering must decide whether to accept the lower price, renegotiate, or reject the new offer and risk putting the property back on the market.
You accepted an offer of £350,000 on your property two months ago. The day before exchange, the buyer reduces their offer to £335,000, claiming that house prices have fallen. You reluctantly accept because you have already found your next home and do not want to lose the sale.
Key Points
- A buyer lowers their offer just before exchange of contracts
- Legal in England and Wales but considered poor practice
- More common in falling or uncertain property markets
- Can cause the entire property chain to collapse
- Sellers must weigh up accepting, renegotiating or rejecting the lower offer