‘John’ has a dirty little secret – one so shameful that he has insisted on anonymity in order to tell his story. Last year, while in the process of buying a three-bedroom family house in Whitchurch, Hampshire, the 42-year-old office worker committed an act which, while perfectly legal, could kindly be described as ruthless.
‘We made an offer for the house, a bit below the asking price, and it was accepted,’ explains John. ‘But over the weeks that followed we started to have second thoughts. A few friends and family members were surprised at how much we were paying for the property.
‘It got to the point where I was hoping the survey would show something bad, so we could renegotiate, but it didn’t. Two weeks before we planned to exchange contracts, I went back to the estate agent and lowered my offer by £30,000.’
John is a ‘gazunderer’, someone who lowballs a property offer at the 11th hour. The term is thought to derive from Victorian slang for a chamber pot which ‘goesunder’ the bed overnight.
And he got away with it. In a slow, difficult market, the house he was buying had been up for sale for close to a year. His vendors were extremely keen not to lose the property they were purchasing and so they reluctantly acquiesced to John’s demands. He and his young family moved in last summer.
‘Do I feel bad? Not really,’ he says. ‘Offers aren’t legally binding and I started to fear I wasn’t getting a good deal, so I did something about it. I had to think about our best interests.’
The fear of being gazundered or gazumped – when another buyer snatches away a property by swooping in with a higher offer after yours has already been accepted – is so great that it’s deterring aspiring homeowners from entering the property market, according to a survey by Iamproperty. Their research found it to be a bigger concern than rising stamp duty bills or high interest rates.
The UK’s buying system is fraught with pitfalls. Sales take a painfully long time to complete – an average of five months, according to government data. This amounts to a lengthy cooling-off period since neither buyers nor sellers make a legal or financial commitment until contracts are exchanged, usually a couple of weeks before completion.
Things are very different elsewhere. In the United States, as soon as an offer on a property is accepted a contract is drawn up, confirming details such as price and completion date. The buyer then pays a deposit, conveyancing is done and the sale is finalised. The process takes an average of four to seven weeks, according to property portal Zillow.
In New Zealand, buyers make offers in writing. If accepted they can opt to have a survey carried out, and then a legally binding sale agreement is signed and a deposit paid. Then there is a hiatus while mortgages are finalised. The entire process is usually done and dusted in up to six weeks.
In England, though, buyers and sellers are free to play fast and loose with handshake agreements right up to the wire. Gazumping – from the Yiddish word gezumph, which means to cheat or overcharge – tends to happen in hot markets when there are more buyers than homes to buy. Gazundering rears its head in the kind of sticky market we are in now, when homes are hard to sell and owners become desperate. Gazundering also takes hold when confidence in the market is shaken – there was a tidal wave of reduced offers in the wake of the disastrous 2022 mini-Budget, as buyers sought to protect themselves from the ensuing mortgage rate rises.
‘Two weeks before we planned to exchange contracts, I went back to the estate agent and lowered my offer by £30,000. Do I feel bad? Not really’
Mark Lawson, a partner at The Buying Solution, likens gazumpers to love rivals whose desire for a property is enhanced by the fact that someone else wants it enough to try to snap it up. ‘They fear they may not find such a good opportunity again,’ he says. Gazunderers, meanwhile, are bargain-hunters hoping to take advantage of sellers’ desperation to get rid of a property, particularly when they have already waited for weeks – if not months – for a deal to go through. ‘There is a degree of playing chicken – who will blink first?’ says Lawson.
Steve Brown, of Winkworth estate agents, estimates that around one in 20 sales are affected in the current market. Back in the early pandemic period, when buyers were desperate for more space, that figure was more like one in five as buyers fought over a limited supply of property. ‘Legally, until contracts are exchanged, anything can happen,’ says Brown. ‘But while there may be valid reasons for renegotiating, last-minute tactics to squeeze the price down are unfair and always leave a bad taste.’
Brown would like to see the introduction of a system of reservation agreements – a financial commitment from both parties earlier in the process. ‘Faster conveyancing and better upfront information – like early surveys – would also help avoid surprises,’ he says. ‘At the end of the day, buying a home is stressful enough. More certainty would make it fairer for everyone.’
The HomeOwners Alliance campaign group claims a third of wannabe buyers get gazumped, costing them an average of £2,400 in legal and professional fees, plus an incalculable sum in heartache and wasted time. CEO Paula Higgins thinks that a partial solution would be banning estate agents from continuing to advertise homes which are under offer – listing them as STC (Sold Subject to Contract) is simply shorthand for come and make a better offer, she says.
Until the rules are changed neither buyers or sellers can really protect themselves. But Carol Peett, managing director of West Wales Property Finders, feels both might benefit from a charm offensive. ‘We would always recommend, where possible, that whether selling or buying a property you try to build a relationship with the other party. That way they are more likely to feel too guilty to try to mess you around,’ she says.
A longer-term but more robust solution would be to reframe England’s buying process completely. ‘The present system of nothing being binding until exchange – and particularly as the conveyancing process now tends to take such a long time – is extremely unsatisfactory and I think must be changed,’ says Peett. ‘Once an offer is accepted it should be binding and a non-refundable deposit of some sort paid.’
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