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Gazundering cases show up as buyers cut offers before exchange
In England and Wales, an offer is not legally binding until contracts are exchanged, leaving sellers exposed to last minute price drops.
BBC Business reports that gazundering, where buyers lower their agreed offer just before contracts are exchanged, is a rare but growing problem in England and Wales. The outlet describes one seller’s experience where the buyers cut the price by £15,000 the day before exchanging contracts, putting the deal at risk.
The Conveyancing Association is calling for government reforms to tackle gazundering and other house buying and selling issues, urging changes to be introduced without delay rather than waiting until 2029. The article notes that in England and Wales offers are not legally binding until exchange, which allows a buyer to reduce their offer and potentially collapse a chain if sellers refuse.
The story says it takes an average of 120 days to complete after an offer is accepted, and that one in three house sales fall through before exchange. It cites the Ministry for Housing, Communities and Local Government estimates that failed transactions cost sellers £400 million and the wider economy £1.5 billion each year, and says planned reforms would cut completion time by four weeks and save the average first time buyer £650.
After receiving the lower offer, the seller decided to put her property back on the market the same day, according to BBC Business. The following day, the buyers returned to the estate agent’s office and moved forward with the sale.