House buyers are reducing their offers before exchanging contracts
(Picture: Getty Images)Property buyers are gazundering sellers as the housing market responds to the cost-of-living crisis.
Although it has been a sellers’ market for a few years, rising interest rates mean the market is cooling off and property prices are falling.
Now, a law firm has estimated that gazundering is happening in around half of all sales.
But what is gazundering and when does a buyer do it?
What is gazundering?
Gazundering, also known as price chipping, is when someone lowers their offer they originally made on a property before the exchange of contracts.
The Post Office says: “This can sometimes be a cynical move from the buyer, particularly if the sale is time-sensitive or contracts are exchanged on the day of sale.
“But it can also be out of the buyer’s hands if they’re reacting to something that has happened at their end of the chain, or because of issues that have been flagged in a survey.”
Sometimes, buyers will lower their offer after the survey has found that something in the house needs to be fixed, such as damp or an electrical problem.
It’s different from gazumping, which is when a seller accepts a higher offer from another buyer, after already accepting an offer.
Simon Nosworthy, head of residential conveyancing at Osbornes Law, said: “Price chipping is a sign that the market is weaker and that the pendulum of power is swinging from the seller to the buyer.
“It has been a sellers’ market for the past few years but, with rising interest rates and the cost-of-living crisis, that is changing. Sellers are left in a difficult position of losing their buyer when the market is turning or having to accept thousands of pounds less.”
