How to ... avoid being gazundered when selling your home

How to ... avoid being gazundered when selling your home

Gazundering has not been around for 15 years. Now it is back - with a vengeance. Those who were not home owners in the housing crash of the 1990s may not even know of this phenomenon, which occurs when a buyer dramatically lowers his or her offer on a home after a price has been agreed, but just before contracts are signed.

The desperate seller is put on the spot. He must either accept the lower figure, or reject it and start the entire sales process all over again. Not a happy dilemma.

Donna Werbner, property expert at personal finance website fool.co.uk, confirms: "With house prices dropping, the practice of gazundering is coming back into fashion. People may think such a practice is unethical, or even immoral. But in a market where prices are falling rapidly, it's actually understandable."

In England and Wales, where there are no binding agreements on sale price until the contract stage, gazundering effectively disappears when house values are naturally rising. Then, it is replaced by gazumping, when a seller takes a late offer above the originally accepted figure.

But now prices are falling - and what's more, the introduction of some "no sale, no fee" conveyancing means buyers can progress a sale much further than before without spending a fortune. Then, if their gazundering offer is rejected, they can walk away pretty much unscathed. Werbner offers some tips on how to guard against such a scenario ...

Set a realistic.....continued below

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asking price The less time it takes you to get an offer, the less desperate you will be to sell at any price.

If possible, opt for a chain-free buyer The quicker a buyer can move, the more valuable the offer.

Be upfront and honest about any defects If the buyer is aware of problems from the start, it is far more difficult for them to turn around later and use this as a reason to haggle down the price.

Get evidence State you want proof of the buyer's reasons for reducing the offer.

Be reasonable Maybe you could make a counter-offer? Remember, there are two sides to negotiating.

Weigh up the risk Consider the chances that the same thing might happen again with another buyer, and the costs you will lose on this current sale.

What matters most? Ask yourself what is most important: the sale or the money?

So is gazundering acceptable? The property establishment says no, unless it is linked to a problem with the home thrown up by the survey and valuation.

"Gazundering should be assessed on an individual basis," says Benson Beard of estate agency Bective Leslie Marsh.

"A buyer may have paid full price and, after a valuation, decided they are paying too much. The agent has to make a call: will we ever get that level again - and are there valid reasons for the reduced offer?

"But there are cowboys trying to buy from distressed sellers and thinking: 'If they will accept 10% less, then why not offer 20%?' This is when it's morally wrong."

Perhaps surprisingly, buying agents - property professionals hired by buyers to find and negotiate the lowest price on a house purchase - also oppose the tactic.