Gazundering
Last year, there was a 97% increase [1] in people searching for the word ‘gazundering’ – when a homebuyer reduces their offer on a property at the last minute, sometimes just before completion. This leaves the seller in a difficult position, often without much choice but to accept a lower price. Gazundering is indicative of a buyer’s market where there are more properties on sale than people wanting to buy.
Gazumping
In periods where the tables are turned and the market favours the seller, gazumping may occur more – this is when a seller receives a higher offer from someone else, even though the transaction process has started with a different buyer.
Stricter rules in Scotland
Interestingly, both gazundering and gazumping are not as commonplace in Scotland – while it does still happen, Law Society of Scotland has rules in place to prevent gazundering and gazumping. Solicitors acting on behalf of property buyers are not permitted to lower their initial offer, while those representing property sellers cannot accept an offer from another buyer.
[1] GetAgent.co.uk, 2023
🚨 Data accurate as of the date of publication – 15.03.2024
🚨Think carefully before securing debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.
🚨 The above material is for informational purposes only and does not constitute a sales offer or financial advice. Before taking out any insurance, credit agreement or other financial product, you should obtain individual advice on your requirements and the general terms of the contract.
Source: Quilter Financial Planning – Essentially Mortgages Q1 2024
