Q&A: gazundering and gazumping

Last Modified: 06 May 2008
By: Channel 4 News

A new survey suggests nearly all of us would consider trying to force down the price at the last minute. What does it all mean?

What is gazundering?

Gazundering occurs when a homebuyer demands that the seller reduces the agreed price of a property. Typically, the request is timed to make it difficult for the seller not to agree to a price reduction.

Gazumping - the opposite of gazundering - is common during a seller's market. It occurs when the seller accepts an offer on a house and subsequently increases the price or accepts a higher offer from another buyer.

When does gazundering happen?

Gazundering happens when property prices are perceived to be in decline - in other words, when it is a buyer's market.

Why is gazundering in the news?

A report last week by Nationwide confirmed a decline in property prices in the UK. It said that house prices had fallen 1.1 per cent over the last year.

If that is added to the yearly fall in house prices recorded in the two preceding months - 0.5 per cent in February and 0.7 per cent in March - you get an annualised fall of around 9 per cent.

Should people worry about gazundering?

If you own a property and are contemplating selling, then it will of course be a concern.

If you are a buyer the worry is that, in a falling market, the property you are interested in may actually have fallen in value by the time you have bought it.

Equally disturbing is a new survey commissioned by the money website Fool.co.uk, which states that 94 per cent of Britons would try to force down the cost of a house at the last minute - and that, despite the fact that more than half of those questioned also thought gazundering was unethical.