By ‘gazunder’, we do not mean the old ceramic pots that you used to ‘go under your bed’ i.e., ‘gazunder the bed’ to relief yourself in the middle of the night to save you venturing outside in the cold of the outside toliet. In days gone by for extremely people, saving urine to sell to leather tanneries was a means to earn a few pennies for food. The poorest of the poor were even said to be “so poor they havent got a pot to p**s in”.
Please excuse the vulgarity but back now to gazumping and gazundering in the property market.
What is Gazumping?
Most of us will have heard the term ‘Gazumping’. This is when you put in a offer for a property that is accepted and then someone else makes a higher offer for the property that is subsequently accepted and they buy the house. Gazumping is entirely legal in the UK and some property specuialists estimate that over 30% of property owners have been gazumped at some point. It is only when you exchange contracts for the purchase that the sale is legally binding.
How to avoid being gazumped: Many people, like us, when making an offer on a property make it a condition of the offer that the agent and vendor immediately stop further viewings of the property for sale. To be fair, if the seller and agent are not prepared to do this then you should be prepared to move quickly or lose the property. You may also wish to consider a ‘lock out’ agreement where an agreement is reached, particularly on larger properties or where considerable expenses are incurred ahead of the sale e.g., subsidence tests and ‘mundic’ block reports, for the seller to cover your expnenses if they pull out.
What is Gazundering?
Many estate agents and legal advisers are now reporting a rising incidence of gazundering. Gazundering is the opposite to gazumping.
You have accepted an offer to buy your property and then at the last minute, your purchaser withdraws their agreed offer and makes a reduced offer. This is acceptable if the surveyor has down valued the property but for many, as is happening right now in 2022, many people fear that property prices have already started to fall and could fall much more with interest rate increases, cost of living increases, recession, people losing jobs and negative property market sentiment. In the same way as gazumping, consider moving as quckly as you can if you are selling and have accepted an offer. Secure a ‘lock in’ agreement for the purchaser to cover your costs incurred if they withdraw from the purchase or come back and say they are pulling out unless you accept an unjustfiably lower offer.
We have offered this up as a news item this week as research from Osborne Law on various solicitors has found that around 50% of currently agreed property sales are experiencing gazundering, so it is better to be prepared if you are selling or planning to sell.