You may have heard of these odd terms before, if you’ve bought or sold a house recently (it’s a modern phenomenon) you may have even been warned about either of these happening.
Both gazundering and gazumping are poor etiquette in the art of buying and selling properties. Here’s what they mean…
This is when a buyer of a property lowers their offer just before a contract to purchase a house is due to be signed, almost at the last moment. This proposition puts the seller in a tricky situation because they want to complete the deal as typically there is a lot at stake (like schools organised, removal trucks at the ready, etc.) but proceeding may mean they potentially lose out on a fair bit of money… essentially they are being backed into a corner.
Sellers are well within their rights to refuse this lower offer but in doing so it’s likely the chain will fall apart at this stage.
How can it be avoided?
To avoid being gazundered keep the chain moving quickly so that no one has time for second thoughts. It’s also always a good idea to be upfront about any issues with the property so that buyers can’t use them as bargaining chips to negotiate the offer at the 11th hour. For more professional information on how to avoid gazundering click here.
This is when a new buyer makes a higher offer on a house that has already accepted a previous buyer’s offer and so the seller then goes with the new higher bidder and the original buyer is ‘gazumped’.
Because there are no contracts exchanged at the point of offers – whether accepted or not – the seller has no obligation to help recoup costs lost during the process (like surveyor’s fees or legal fees).
Unfortunately at the moment gazumping in England and Wales is not illegal.
How can it be avoided?
The best way to help avoid being gazumped is to sign an exclusivity agreement that details the partnership with the seller, and also to keep the buying process moving as quickly as possible. It’s also a good idea to request and require that the property is taken off the market once your offer has been accepted… so that it’s harder for others to interfere. For more professional advice on how to avoid being gazumped click here.
For details on the buying process of a house, in a step-by-step guide click here.