What Is Gazundering?

Gazundering occurs when a buyer reduces their offer after it has been accepted — typically shortly before exchange of contracts. Because neither party is legally committed until exchange, this is legal in England and Wales. The seller faces a difficult choice: accept the lower price, attempt to negotiate, or reject the reduction and risk the sale falling through.

Why Buyers Gazunder

Buyers gazunder for a variety of reasons:

• The survey has identified issues that the buyer believes justify a price reduction
• The buyer's financial circumstances have changed and they can no longer afford the original price
• The market has moved and the buyer believes the property is now worth less than they agreed to pay
• The buyer is using their position — close to exchange, with the seller committed — to extract a concession they could not have obtained earlier
• The buyer has found a problem with the property information that was not apparent at the time of the offer

Is It Legal?

Yes — gazundering is legal in England and Wales. Until contracts are exchanged, neither party is bound by the agreed price. A buyer who reduces their offer is not in breach of any legal obligation, though they may be acting in bad faith. This is one of the most criticised features of the English and Welsh conveyancing system.

How to Respond

When faced with a gazundering attempt, sellers have several options:

• Reject the reduction and hold firm — this works best if you have other interested buyers or if the reduction is clearly opportunistic
• Counter-offer at a figure between the original price and the reduced offer
• Accept the reduction if the alternative is a fall-through that would cost you more in time and money
• Ask your agent to find out the reason for the reduction — if it is survey-related, consider whether the concern is valid

How to Reduce the Risk

Sellers can reduce the risk of gazundering by:

• Choosing the strongest buyer, not just the highest offer — a buyer who is financially secure and motivated is less likely to gazunder
• Moving quickly to exchange — the shorter the pre-exchange period, the less time a buyer has to change their mind
• Preparing property information thoroughly before marketing — surprises at the enquiry stage give buyers a reason to renegotiate
• Addressing known issues before marketing rather than leaving them to be discovered by a survey