In the world of property transactions, there are two things which stand as a source of frustration for both property sellers and buyers alike: gazumping and gazundering.
Both practices, while legally permissible, have been the grievance of many a property deal, causing unexpected complications, stress, and financial consequences.
What is gazumping?
Gazumping occurs when a seller accepts a verbal offer from one potential buyer, only to later accept a higher offer from another party before contracts are exchanged.
The problems gazumping poses for buyers:
- Financial loss – buyers can lose money that they’ve invested in the process, including things such as solicitor fees and survey costs
- Stress – finding a property and losing out on it, can be upsetting and leave buyers wary of the entire buying process
- Delay in property search – after being gazumped, buyers must begin their property search anew, causing delays and potential missed opportunities elsewhere
What is gazundering?
Gazundering is the opposite of gazumping. It happens when a buyer, having previously agreed on a price with the seller, decides to reduce their offer just before contracts are exchanged. The seller is then put in a difficult position of either accepting the lower price or risking the sale falling through.
The problems gazundering poses for buyers:
- Risk of losing the property – sellers may be financially stretched by the lower offer and decide to pull out of the deal
- Reputation – if a buyer gets a reputation for gazundering, they might find it hard to be taken seriously in future negotiations
- Increased stress – engaging in gazundering not only puts strain on the relationship with the seller but also adds uncertainty to the entire process
Combatting gazumping and gazundering:
While gazumping and gazundering remain challenges within the UK property market, being aware of the risks and proactive in your approach can help reduce their impacts.
A combination of swift action, open communication, and where possible, legal or contractual safeguards can assist buyers in navigating property purchasing.
If you would like more information about buying a property, please do not hesitate to contact us today.