Saturday, Apr 26, 2008
Let's all laugh at the greedy sellers
Guardian: Gazundering ... it's just daylight robbery
We've been mugged! That, according to Guardian Money readers, pretty much sums up what it feels like to be "gazundered".
Gazundering is where a homebuyer demands a reduction on the agreed purchase price at the 11th hour, and it often rears its ugly head when house prices are falling.
Several readers told us their gazundering horror stories, and here are a selection:
Posted by little professor @ 02:22 PM (1291 views) Add Comment
20 Comments
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1. fun 4 now said...
mmm...what about 'gazumping'...or is that different!
2. Doug Juhani said...
HA! The shoe is on the other foot!
That is, of course, if the shoe has not been repossesed yet.
3. uncle tom said...
Wasn't the problem of gazumping and gazundering one of the arguments for introducing HIPS? Fat lot of good they've been!
The whole process of making offers to buy properties is too informal.
A person should only be entitled to review an offer to buy if material facts are uncovered that they were not previously aware of, or circumstances change that they could not reasonably have anticipated at the time the offer was made; and even then the revised offer should be reasonable and proportionate. A vendor should be able to seek damages in any other eventuality.
In theory, I think vendors already have some recourse to law if this happens, but it is currently too easy for a purchaser to find spurious reasons to justify themselves, and get a case dismissed.
4. harold said...
UT, I believe things are different in Scotland.
5. harold said...
"Let's all laugh at the greedy sellers"
LP, unfortunate title.
6. icarus said...
Forget about 'moral' and 'immoral' and just change the law.
7. Landedgentry said...
Tis the season to gazunder.......
8. paul said...
I think anyone intelligent reading the story would conclude that if gazumping is fair game, gazundering is the same thing.
9. gone-to-colombia said...
This practice has nothing to do with honesty, its just part of the buyer seller relationship. It is everything to do with law.
We might say that it is moraly wrong, but morality has very little to do with negotiating a price. If we allow such negotiation to continue right up
until the moment of exchange then price rises or drops will happen.
Yet, this is a minor moral issue compared with the sheer greed of recent years. Greed that has altered the ability of everyone with a job to own a home.
In this matter it seems that morality is subjective, the sole right of some and not others.
10. Sogy said...
As late as a year ago gazzumping was rampant here in Northern Ireland. Now that the "haves" have found themselves at the receiving end... the mirror image of what they practiced is suddenly "immoral"...
11. paul said...
Good point colombia.
This practice is an unavoidable consequence of the buying and selling process as it is.
In Scotland however, I believe that when you make an offer verbally, it is binding?
12. it_is_going_with_a_bang said...
If its legal then theres nothing anyone can do about it other than moan if they are not benefiting from it.
The problem is there are so many things that can wrong with a property that you just can't see at point of offer.
If you dont like it go to an auction thats what they are there for.
Its only an issue in a falling market. But then you could argue the point that of prices have fallen maybe 5% since you started negotiating then why pay the full asking price?
You would surely only want to pay what its worth?
It's not a perfect system but then I don't think anything else would be either.
13. Orwell said...
"...Imagine, if people go into a shop to buy a product and at the cash register demand to pay less. It would only work at markets in third world countries..."
Yes in third world economies ... errrrm like those that rely on purely house price inflation for their 'economy' and bank roll their banks to the tune of £200 (billion) when it all goes so wrong?
14. Duncan said...
Back in 1995 my buyer tried to Gazunder me when they couldn't get a big enough mortgage.
I just pulled out of the sale (and was stuck with the house for another three years). To add
insult to injury they bought a bigger house in the same road about nine months later (presumably
once their finances had improved).
:- Duncan
Bought 1989 took until 1999 to get my money back.
15. gone-to-colombia said...
Law has been my profession but I am not an expert on the law in Scotland.
I do know quite a bit about the system of house purchase in the USA.
Once an offer is made and good will money paid the contract is binding. The goodwill money can be lost if the buyer drops out.
One factor that can alter this is the house survey, if some unstated fault is found then the price can be lowered to pay the cost of repair.
I do not believe it is possible to raise the price.
I do not admire the American legal system in general, but the laws regarding house purchase seem sensible.
16. paul said...
But colombia, gazundering is changing the price just before contracts are due to be exchanged and the transaction has been informally agreed.
It is holding the seller to ransom, but then again, gazumping is when the seller asks for more money at the last minute.
Excatly the same and morally identical.
17. gone-to-colombia said...
Paul - I totally agree, morally the same.
18. bystander said...
agreed paul and columbia, but not one mention of gazumping in the article. Typical VI sh*te, when all is going up, gazumping is just a way of getting the best price for the property (as the vendor and the EA, who benefits from a higher price as well), surely in a falling market gazundering is just trying to get the best price for the property (as the buyer), but yet again its the poor old seller who gets the sympathy. Stuff the buyer who has waited to find the right place only to have it taken from them at the last minute by the greed of the vendor and the EA. Krusty and Phil made it painfully clear that in a rising market aggressive techniques were necessary to secure a purchase, well guess what in a falling the market the same applies.
19. gone-to-colombia said...
Completely agree bystander.
When it comes to my turn to buy back into the property market I will use every tactic to get the best price.
What the seller, estate agent or solicitor thinks of me will be of no concern.
20. Chubby said...
You could argue that this is a sign of how quickly the market could be falling. If prices were fair/sustainable it would not be possible to do this i think, as the seller would feel comfortable with the price and hold out for another buyer. If this has been working for buyers, it can only suggest that the sellers are desperate to sell and do not expect too many other offers at or around the asking price.