You offered in June, it was accepted, and you have spent three months and about £2,000 on a survey, searches and solicitor's fees. Now it is September, the survey has found damp and the house two doors down has just sold for less than you are paying. Someone at work says "just knock ten grand off". That is gazundering, and whether you are the buyer or the seller, it helps to know how it works.
What is the difference between gazundering and gazumping?
Gazumping is the seller's move: they accept your offer and then take a higher one from someone else before exchange. Gazundering is the buyer's move: you agreed a price and then reduce it days before exchange, when the seller has packed boxes and a purchase of their own depending on yours.
Both happen because in England and Wales an accepted offer is not a contract. Until both solicitors have exchanged signed contracts, either side can walk away or change the terms, losing only what they have already spent. Scotland is different: once missives are concluded, both sides are bound, so gazundering there is rare.
Why does gazundering happen?
Three reasons come up. The first is the survey. A Level 2 or Level 3 survey arrives six weeks in and says the roof needs £8,000 of work, or the extension has no building regulations sign off.
The second is the market. If prices in the postcode have slipped since the offer, or the lender's valuation comes in under the agreed price, the buyer is being asked to overpay by their own bank's reckoning. The third is the chain. A buyer who is being gazundered further down passes the cut upwards, because the alternative is the whole thing collapsing. None of these is dishonest, exactly. A reduction with no new information behind it is the version that gives the practice its reputation.
Does the seller have to accept?
No. The seller can refuse and put the house back on the market. In practice a seller who is three months in and mid chain often accepts some of the reduction, which is exactly what the buyer is counting on.
A seller can lower the odds by having the answers ready before a survey asks: the guarantee for the damp proof course, the FENSA certificate for the windows, the completion certificate for the loft. A buyer who already knows what they are buying has less to renegotiate.
How does knowing the registers first help?
Most gazundering comes from a surprise: the buyer offered on the photos and the floor plan, and everything else arrived later. If you know before offering that the house sits in flood zone 2, that the freeholder is a company in Guernsey, that an application for eleven flats on the car park next door was validated in March, or that the last sale was £30,000 below asking, you can offer the right number in the first place.
For a seller, the same registers show what a buyer's solicitor is about to find. If the CON29 search is going to mention a Section 106 agreement or a sewer under the extension, it is better to know in June than in September.
What should I ask?
As a buyer, ask the agent: "Has the property been under offer before, and why did it fall through?" and "Has the seller had a survey or valuation done recently?" Ask your solicitor: "Is there anything in the searches that would change what I think the house is worth?"
As a seller, ask your agent: "Is the buyer's mortgage offer through, and what did the valuation say?" and "Are they in a chain, and how far along is the bottom of it?" If the buyer comes back with a reduction, ask for the survey page it is based on.
How Eavesdrop checks this
Eavesdrop reads the Land Registry price paid data, the Environment Agency flood maps, the local planning register, the EPC register and Companies House before you offer, so the number you put in is the number you can stand behind. See [check: house-history] and [check: planning-next-door]. Before you offer. Before you sign. Eavesdrop.
Quick answers
Is gazundering legal? Yes, in England and Wales. Until exchange of contracts neither side is bound, so a buyer can lower their offer at any point before then.
What is the difference between gazumping and gazundering? Gazumping is a seller accepting a higher offer after agreeing yours. Gazundering is a buyer reducing their agreed offer shortly before exchange.
Can a seller refuse a gazundering offer? Yes. The seller can reject the lower figure and remarket the property, though they cannot recover the time or the fees already spent.
Sources: HM Land Registry price paid data; Law Society Conveyancing Protocol and TA6 Property Information Form; Law Society of Scotland guidance on missives; RICS Home Survey Standard.
