Legitimate opportunism or bordering on the criminal? However you judge it, gazundering seems to be making a comeback.
This buyer’s tactic of dropping the offer price on a property just before contracts are exchanged hasn’t been seen for several years. But new research and anecdotal evidence suggests it is returning with a vengeance: two sets of recent findings hail the re-emergence of the g-word. Abbey found that 15 per cent of first-time buyers are now prepared to gazunder and the Yorkshire Bank reckons it is as high as 18 per cent.
People at the sharp end of sales believe it could be even more prevalent. “I’d say it was becoming quite common,” says Esther Acworth who owns a portfolio of properties and works as a trainee negotiator with the London estate agency Stirling Ackroyd. “I know clients who have experienced it. I know lots of colleagues who have experienced it. And I know I’ve experienced it myself – twice in the last 12 months.”
A government report, optimistically titled The Key to Easier Home Buying and Selling, also confirms the presence of gazundering and states: “In pockets where it does occur the incidence may be high.”
BBC Radio 4’s consumer programme, You and Yours suggests these gazundering hotspots are to be found in London, North Wales, North West England and parts of Scotland.
So why is gazundering back? Experts point to two reasons.
The first is the market. According to the Halifax House Price Index, prices rose by just 0.5 per cent in March, offsetting the 0.5 per cent fall in February. Overall there has been “virtually no change” since September.
The second reason is an apparent backlash from some first-time buyers. “They’ve had zero power and now they have a little, they’re wielding it,” says Ben Brandt, editor of the property weblog, TheRatAndMouse.co.uk. “They really have felt very angry and very frustrated, and for a very long time. We are seeing the results of that now.”
Some commentators understand but refuse to justifycondone gazundering; others accept it as just part of a process where all parties seek to get the best deal for themselves; others still are outraged at the behaviour.
“It’s disgusting,” says Mira Bar-Hillel, consultant editor of the Which? Guide to Buying, Selling and Moving House.
“I wish it was a crime. It is combination of robbery and blackmail. And there is no excuse for it. None whatsoever.”
Interestingly, as we go to press, one group of interested individuals, the property programming division of Channel 4, is conducting an online questionnaire into the morality of the issue.
Whatever the rights or wrongs of gazundering, its impact is beyond question. “It really is incredibly stressful,” says Ben Leek, who went through what he calls “an attempted gazunder” while selling his three-bedroom flat in London last December. “On the day we were to exchange I was offered £5,000 below the agreed price of £322,000.” In the end, Leek, who has since gone into the property business, “called their bluff and won”.
But what, if anything, can sellers do to defend themselves? In terms of guarding yourself against a gazunderer, research has uncovered additional bolshie Several strategies have been tried.
One seller, faced at the eleventh hour with an offer £12,000 less than agreed, says she managed to get her estate agent to extract £2,000 from everyone else in the chain to cover the last- minute demand.
Another, sensing an impending gazunder, says he got his estate agent to agree that, if the worst happened, the agency would pick up the difference – which, apparently, it duly did to the tune of £10,000.
Peter Bolton King, chief executive of the National Association of Estate Agents, recommends a more proactive approach. The first piece of advice is to “try to develop a rapport with the buyer. This may not be possible, but if it is they may just think twice about gazundering you.”
One London-based agency has formalised this tactic. Greene Co now asks buyers to sign a “Goodwill Charter”, agreeing to honour the agreed price or else lose a £2,000 bond.
Managing director David Pollock says the initiative has reduced the number of failed deals by 70 per cent. King’s second piece of advice is to “try to condense the whole process and reduce a gazunderer’s window of opportunity”.
A new service claims to be able to do this. The Spring Home Information Pack, currently being trialled, provides independent reports and surveys on a property in advance of a sale and is similar to the government’s Home Information Pack, due to be launched in 2007.
Spring founder, Stephen Foden, says “it can enable a sale to go through in 24 hours”.
To some, sellers packs or goodwill charters seem unnecessary. But, given anecdotal evidence that would-be buyers are getting increasingly nervous, sellers need all the help they can get.
