Is gazundering ever justified?

I always encourage people to negotiate prices when they purchase items of a certain value. You have nothing to lose, the worst being that you don’t get a discount. You are either happy to accept it and pay the full amount, or go somewhere else to see if you can get the same item cheaper.

The same applies when buying property. After having done your research, and if you believe that a lower offer is justified (market conditions, how long the property has been on the market, potential structural problems to fix, poor presentation, etc.), go for it.

Remember, a property is only worth what somebody is willing to pay for it. If you feel uncertain or uncomfortable about doing the negotiation yourself then I recommend that you get someone who is a confident negotiator to do it for you - a friend, a family member or a professional property finder.

But be aware – there is a significant difference between negotiation and the appalling practice of gazundering! Gazundering involves unscrupulous buyers waiting until around the time of exchange and then lowering their offer with the anticipation that the seller will be reluctant to lose the sale. If sellers’ hands are tied they have got no choice but to accept it, or they can fight back by rejecting the lower offer and then withdrawing on principle.

As a seller, bear this possibility in mind and prepare your strategy in advance. Be ready to counteract based on your circumstances (are you desperate to sell or not) should gazundering happen to you.

When buyers make offers, I recommend sellers to try to get as much information as possible about their circumstances. Have they got a property to sell? Is there a chain? Are they first-time buyers, investors or cash buyers with nothing to sell? This will enable the seller to assess the potential impact and risks to the buyer of losing the property should that buyer play the dangerous game of gazundering.

When buyers have justified reasons for lowering their original offer (for example the survey has highlighted problems that will cost money to fix), this is not gazundering. So consider the offer and renegotiate accordingly.

However, when the buyer is simply playing a game to pay less money, then my advice is to always try to refuse to back down, or to even withdraw from the sale. Why should you trust this person again? What else are they likely to try next?

If the circumstances allow, contact any other interested buyers who had also made offers, or simply put the property back on the market. If you are in a weak situation because of time or money pressures, don’t let the buyer know about it. Apply the strategy you will have rehearsed in advance to prevent you losing too much money.

At Chez-Vous HomeSearch, we believe that any negotiation should be based on trust. Both parties (seller and buyer) should agree on a price at the beginning of the transaction and should stick to it.

Next time I will look at the issue of gazumping where the roles are reversed!

Laurent Stadelmann
Managing Director

Chez-Vous HomeSearch
Removing stress from the property process!

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laurent@chez-vous.biz
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Tel: +44 (0) 1189 770215