Buyer tried gazunder before exchange

[PickNMixwe]

Selling a house but I've already moved, so though I'd like to complete sooner rather than later, there's no chain, just the buyer due to move from rented upon completion.

It is a very good house in a popular area. There were multiple offers back in June when it went on the market, it was priced low (my choice) as I wanted to get on with it. The buyer has a mortgage offer, survey with no known issues and all legal work completed.

We were due to exchange this week, but the buyer unexpectedly said they want to do some renovations due to parts being a bit dated and so they want a £10k reduction.

I have said no, the agent also advised me to say no, they've got a great house at a great price. Now I'm waiting to hear on Tues whether we're proceeding at the agreed price (which apparently they can easily afford). The agent is very decent and it won't cost me £10k to start again, he can easily get another buyer at this price, but the whole thing is very frustrating.

I think often buyers go ahead once a gazunder has been declined? They've spent a load on surveys and legal work. Feeling a bit fed up.

Gazumping and gazundering could both be avoided if England adopted the same laws that many other countries have (eg Scotland, USA, NZ).
That is, the contract is made when one party agrees to sell to another party for £x price, subject to survey, and the buyer puts down a deposit (usually at least 10%).
No-one can just change their mind without losing their deposit, or ask for money off unless there are serious issues with the house.
I think the only reason we don't adopt this very sensible system is that solicitors and, to a lesser extent EAs, make a lot of money out of it.
But it does make the whole process of buying and selling incredibly stressful.

With that system, how do you then renegotiate after survey? And if the survey turns up something that means you would rather not buy at all, regardless of price, are you still obliged?

In our system, nothing is binding until exchange of contracts. Surveys are done after the offer, but the offer means nothing much until exchange is done. So yes, you are spending out on a survey for a house that you might still lose, but the alternative is to be forced to commit to buy a house before you have a survey done.

Gazundering and gazumping happen after offer but before exchange.
Completion is a separate thing, that can either be done on the same day as exchange (inadvisable) or later after exchange.

It is. I thought this was going to be about a CF buyer using an antique decorative chamber pot while viewing the house! Isn’t ‘gazumping’ the term?

I think I would say no

I worried about this happening with our property but fortunately it didn’t. Even if it does need work I’m sure you priced it accordingly.

😆

We had the same thing happen when we sold, the buyers were hateful long before that point and then the day before exchange offered £10k less citing the renovations the house would need.

The mortgage broker told me they had a huge deposit and could afford the house. They were just entitled and wanted to screw us over. We declined, told them if they did this when they first put the offer in we would have considered but put an offer on a new house based on the selling price of the new house.

I love that you sound unphased by this, you should be. More than likely tomorrow they will get back to the EA and say that is fine they want to proceed. It will then be up to you if you want to sell to them. Give them a time limit if they have not responded by tomorrow morning they need to get back to you EOP Tuesday or the house goes back on the market weds morning. If it goes back on might be worth you increasing the price by £10k. Good luck OP, what an unnecessary stress.

I'm more familiar with the American system, as I bought and sold when I lived there many years ago.
But I believe the principles are the same in Scotland, New Zealand etc.

When the buyer makes an offer and the seller accepts, a contract is drawn up, including contingencies which are agreed by both parties.
Contingencies would typically be: subject to buyer getting a loan (mortgage); satisfactory house inspection (any issues coming to light can lead to a further negotiation on price, or seller can agree to fix).
It would NOT include either party just changing their mind.

Once that is all sorted and the contract is amended (and this usually happens quite quickly), closing (completion) also happens quite quickly. The whole process typically happens in a matter of weeks rather than months.

No, it's not the term.

Google gazumping and gazundering - 2 different things.

I wouldn't be happy with a system whereby before I had a survey done I had to agree not to back out.
I prefer to have the legal exchange of contracts after survey.
Sometimes adjusting the price is not enough, I would want to be able to back out completely if the survey turned up something major.

@Gengha I don’t think people go to the expense of commissioning a survey on a property on which an offer has not been accepted.

You buy as is, not as you hope you want it, so a firm no here and we had this, but I said no hurry, so we'd remarket, they stuck to the original offer.

Simple then “sorry, I already priced the house competitively so I won’t be reducing it further. In fact, I could probably put it up £10k if it goes back on the market, your choice”.

Why wouldn't you just pull out, though, without blethering about needing a reduction in the price? You're already going to make yourself deeply unpopular; and it's not even like you can make the seller look like the bad guy when YOU have latterly moved the agreed goalposts.

How does it actually help you if you've got cold feet about the purchase, but they agree to your demanded reduction, putting you under even more pressure to go ahead?

I had this in a similar situation where the house was more than fairly priced but I wanted a quick sale. Absolutely scummy behaviour that he justified because he’d been inconvenienced by the length of time the searches had taken. I told the estate agent that I was very firm on price and that he had 24 hours to agree to proceed as planned or I’d remarket. Also that they should relay word for word that his behaviour was awful and that I’d be happy to lose time and money rather than give into this. I think being really firm and not looking weak in these situations helps or it did in that case anyway because he apologised and agreed to move forward as planned.

The only things that should be up for debate is how soon this practice is illegal and what the penalty should be. I would require all FCA regulated lenders to be unable to lend money to anyone guilty of this practice for a period of time, say five years.

Does that actually make any difference in how they behave, though, when they're in a position where they think they might well get away with it anyway?

It just makes me think of when people put up adverts that say 'no timewasters' - do the people who were fully intending to waste your time see that and respect your wishes?!

I don't think you'd get anybody who would admit up front that they DO believe in gazumping/gazundering/acting otherwise dishonestly, would you?

I mean, RTFT

To be fair, that comment was made right near the beginning of the thread, and was (I thought) clearly lighthearted... and whilst I personally know the difference between gazumping and gazundering, my mind also went straight to a chamber pot!

I would instruct the agent to put it back on the market tomorrow at 25k higher. That will cover your expenses for this waste of a space buyer!

I mean, who pissed on your chips? Someone aiming at your gazunder?
Fyi I did RTFT. It didn’t retrospectively change what my first genuine thought was when I read the thread title, which is what my comment referenced.

Historical Dialect Meaning

• Chamber pot: In northern England dialects, a gazunder is an old word for a chamber pot kept under the bed.
• Etymology: The name comes from the phrase "goes under" the bed.

Hth.

It would be a flat no from me unless the survey threw up work which needed to be done for them to get a mortgage.
They may be trying it on because of the low price, thinking you must be desperate- pretty shady behaviour I would say.

IME buyers and sellers are as bad as each other. For every buyer trying to lower a price at the last minute there's a seller who is trying to cover something up so they can sell their house for more money than it is actually worth. Or in a buoyant market trying to increase the price at the last minute.

It's just that in the current time, the market is such that the buyer has the power rather than the seller.

Ultimately there is a point at which the sale price is set, and that is exchange of contracts. Proceed accordingly.

As you’re in no hurry I would tell them to fuck right off. They saw any dated areas on viewing and sounds like it was priced fairly anyway. Get your estate agent to tell them no and that you’ve said it sells at the price agreed or goes back on the market by 12pm tomorrow.

Good luck today OP. You're far more sensible than I would be. I'd put it straight back on the market when I heard.

@KeepPumping - I agree with you that it is a business decision, and should be made calmly and coolly, but I don't think it is always as simple as 'Is it worth losing the sale over £10K'. As you suggested in an earlier post, the starting price is a factor - £10K of a £1,000,000 house is peanuts, but it's a lot off a house that's only £120K to start with (in my opinion, anyway).

I also think you have to factor in the market where you are - if the OP knows that houses like hers are selling quickly, at or near asking, in her area, then it would be daft of her to accept being gazundered like this.

For some sellers, that £10K might be the difference between them being able to afford the house they're moving to, or not.

In @PickNMixwe's position, I probably wouldn't agree to the reduction - it sounds as if she can afford to lose this buyer, and will be able to sell easily. But whenever we've bought a house, we have offered what we could afford, and what we thought was the right price for the house, and haven't tried to get cheeky reductions late in the process - personally, I think that is unethical.