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Gazundering Returns...
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Gazundering Returns...
In the absence of gazumping, we see the return of a phenomenon from early 1990s – gazundering. Rachael Harrison sales manager of Robinson and Hall, shares some steps that sellers can take to safeguard their transaction.
Less savoury property buyers are leaving sellers high and dry by demanding a last minute price cut, which can sometimes occur on the day of exchange. Gazundering buyers break sales chains as sellers are frequently no longer able to afford their intended next purchase if they accept a lower offer.
It is unethical, but it is completely legal, and is on the increase. Rachael Harrison of Robinson and Hall provides practical guidance to those at risk.
“The current economic climate has increased the length of purchasing processes far beyond the previous average of eight weeks. Sellers can reduce the threat of being gazundered by taking every possible step to speed the process through to exchanging contracts,” she explained.
Rachael recommends that sellers instruct their solicitors the moment the marketing of their property begins. Ensure that they have the title deeds which are available on request from the mortgage lender. Avoid unnecessary delays by filling in the forms from your solicitor early so that they are ready for when a buyer’s solicitor needs to see them.
Ask whether a full local authority search is included in the Home Information Pack (HIP). Many HIPs exclude this information which can cause the buyer’s solicitor to undertake a new search which could delay completion. Also, prepare copies of planning permission and building regulation consents ahead of time.
If selling a leasehold property, make sure that you have received all the service charge and insurance details from the managing agents. This can take a long time, so requesting the information early can reduce the risk of a delayed exchange.
Genuine buyers are attracted to realistic guide prices, it is important to discuss all offers with your agent to help identify low-risk prospects.
If an offer seems too good to be true compared to current market prices, be prepared to be gazundered. Your buyer might be trying to lock out other offers and drop the price minutes before you exchange contracts.
If you doubt your buyer’s ability to promptly raise finance, insist that your estate agent continues marketing your property until the buyer is in receipt of a mortgage offer. Raising finance is the largest obstacle in today’s climate. Devise a plan of action. What would you do if your buyer reduced their offer late in the sales process? You could face a difficult decision if you intend to buy a property yourself.
Finally, consider selling at auction. It offers the security of a pre-agreed completion date and a binding contract on the fall of the gavel.
Downloads: Property Auction Catalogue |