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Anecdotal - Sale Collaped Day Before Exchange

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A friend went to see a house today. Apparently the house has a lot of potential and in a fantastic area. But it needs a lot of work (complete redecoration, new kitchen, bathroom, windows, boiler, etc). The house had previously been under offer and had just come back on the market. He was told that the reason it was back on the market again was the buyer pulled out the day before exchange after he tried to gazunder by "a lot" and the vendor refused.

I had a look at the house on findaproperty and similar houses in the area. There are several new instructions on at around the same price. So it looks like the original buyer realised prices had fallen and gave them an ultimatum. The house is now clearly very overpriced and would need at least £50k minimum knocked off it to bring it in line with its competitors considering the large amount of work needed to it.

This is in south London so at least in that area there does seem to be some evidence of softening prices :)

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A friend went to see a house today. Apparently the house has a lot of potential and in a fantastic area. But it needs a lot of work (complete redecoration, new kitchen, bathroom,  windows, boiler, etc). The house had previously been under offer and had just come back on the market.  He was told that the reason it was back on the market again was the buyer pulled out the day before exchange after he tried to gazunder by "a lot" and the vendor refused.

I had a look at the house on findaproperty and similar houses in the area. There are several new instructions on at around the same price. So it looks like the original buyer realised prices had fallen and gave them an ultimatum. The house is now clearly very overpriced and would need at least £50k minimum knocked off it to bring it in line with its competitors considering the large amount of work needed to it.

This is in south London so at least in that area there does seem to be some evidence of softening prices  :)

Why did the buyer leave it to the last minute? (Rhetorical qn.)

Why not have a calm conversation with the vendor about general price developments and try to negotiate like a decent, straight dealing gentleman?

Which approach is more likely to succeed (on balance)?

Attempts to gazunder have a high risk of blowing up in your face. Talk of "pay back time" is academic when you don't actually close the deal. (I'm assuming the buyer wanted the house: now he has to start over again / build bridges with the vendor if he wants to return to this particular property.)

Marina: I read that you have some experience of this - in the end (after another 3 months) you got the house cheaper. Would you have done anything differently?

JY

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now he has to start over again / build bridges with the vendor if he wants to return to this particular property.) 

JY

I see what you mean, but that makes it sound as though the vendor is doing the buyer a HUGE favour by deigning to let them buy their house. That also seems to be the case on a few other forums, especially the expat one.

It would definately get my back up....

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I see what you mean, but that makes it sound as though the vendor is doing the buyer a HUGE favour by deigning to let them buy their house.

Well, yes in a sense - if you blow up bridges, expect to have to rebuild them yourself.

It's possible that the would be gazunderer did not consider that his cunning plan could possibly back fire given the apparent strength of his position (he might have got all fired up by listening to dubious advice on internet forums, for instance). If so, he has cut off his nose to spite his face. The vendor is unlikely to want to deal with him again, even if the buyer had the chutzpah to return to the table.

At the end of the day everyone's time has been wasted (the buyer still has to find a house) all because the buyer tried to pull a fast one.

JY

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Well, yes in a sense - if you blow up bridges, expect to have to rebuild them yourself. 

It's possible that the would be gazunderer did not consider that his cunning plan could possibly back fire given the apparent strength of his position (he might have got all fired up by listening to dubious advice on internet forums, for instance).  If so, he has cut off his nose to spite his face.  The vendor is unlikely to want to deal with him again, even if the buyer had the chutzpah to return to the table. 

At the end of the day everyone's time has been wasted (the buyer still has to find a house) all because the buyer tried to pull a fast one.

JY

maybe he had a couple on the go and the other one was much more accomodating re: price? As a buyer, especially in this market, it would be silly to place all of one's oeuvres into a single receptacle

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Why did the buyer leave it to the last minute? (Rhetorical qn.)

Why not have a calm conversation with the vendor about general price developments and try to negotiate like a decent, straight dealing gentleman?

Which approach is more likely to succeed (on balance)?

Attempts to gazunder have a high risk of blowing up in your face.  Talk of "pay back time" is academic when you don't actually close the deal. (I'm assuming the buyer wanted the house: now he has to start over again / build bridges with the vendor if he wants to return to this particular property.) 

Marina: I read that you have some experience of this - in the end (after another 3 months) you got the house cheaper.  Would you have done anything differently?

JY

Isn't the whole thing with gazundering that you wait until the last possible moment in order that the seller is under pressure to accept - that they're committed elsewhere or suchlike. Gazundering is precisely NOT having a reasonable discussion about prices in good time! As for the buyer having done themselves out of something - I would have thought that only a buyer who's actually prepared themselves to walk away would try it - it's a kind of 'worth a shot, nothing to lose' sort of a thing, isn't it?

Might not be nice for sellers but given how much gazumping's gone on in the last five years sellers can hardly be surprised. evil kirsty and watzizchops smarm once - that I saw, and I didn't watch many of those shows - got a seller to gazump ON TV!! The rules of the game that have been set down by in the past few years aren't very nice. It's the sellers' turn now and they're going to have to suck it up.

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evil kirsty and watzizchops smarm once - that I saw, and I didn't watch many of those shows - got a seller to gazump ON TV!!

I remember this episode (it was sometime in 2002) - couldn't believe how they could blatantly encourage gazumping on national TV :angry: Complained about it to channel 4 but didn't get a response other than their standard (meaningless) reply.

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The British house buying system really is a joke. Gazumping and Gazundering don't happen in most civilised countries.

If you put an offer and accepted you have bought the place. in you should pay a deposit and you can't pull out without a very valid reason - ie survey shows the house is completely rotten. Correspondingly the vendor can't keep looking around for better offers.

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I remember this episode (it was sometime in 2002) - couldn't believe how they could blatantly encourage gazumping on national TV  :angry: Complained about it to channel 4 but didn't get a response other than their standard (meaningless) reply.

That sounds about right - Channel 4 smugsters and their pet property boom! Yes, bloody unbelievable. I had always been under the impression that gazumping was regarded as wholly unacceptable and bad for general 'trust' or whatever you want to call it - that that's why it's illegal in Scotland.

Also, although gazundering is not nice, it is unlikely to incur the same costs for the seller as gazumping does for the buyer. Both, of course, would be prevented by having the contract finanlised and binding at a much earlier stage in proceedings, something that the industry doesn't want because EAs and sellers want the option of accepting higher prices after the buyer's paid a grand for a survey - although that won't be an issue after the information packs come in - hurray for them at least.

I know I keep saying it but it's going to be mighty tedious if the bullish-minded are going to get all whiny and reproachful on us and continue to be so for the next 5 years!! You've been dealing it out for years, now you need to take it - man up, for heaven's sake!

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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