Gazundering
- This is the opposite of Gazumping (see above).
- In a falling house-price market, a purchaser offers a second seller a lower offer for a similar property and the seller accepts. The first seller must either accept a lower offer from the same buyer or hold out for a higher offer. The seller has been gazundered! (Goes under). Unfortunately there are often other often emotional factors involved. an unscrupulous buyer will deliberately attempt this practice even when the market is stable. They rely on the cost and inconvenience to the seller including the consequential loss of any onward purchase, to effectively extort the seller into selling the property for less than it is worth to a buyer with integrity. This is the most despicable of such practices.
- Analysis of gazumping and gazundering
- The law of England and Wales (unlike Scotland) enables such practices. Until 'exchange of contracts', either party can withdraw from the sale or purchase with losses incurred by both parties, however and paradoxically, the most committed party invariably loses most.
- The time to complete a sale can take two or three months during which time markets can change. Were the legal system reformed to enable faster sales such practices could be outlawed.
Published: 8 November 2013
Last Updated: 17 November 2021