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Buyers urged not to 'gazunder'
2 May 2008 10:30
Buyers who lower their offer for a house as they are about to exchange contracts, also known as 'gazundering', are taking a big risk, a real estate services provider has warned.
Halifax's latest data indicated that house prices fell by 2.5 per cent in March to an average of £199,556, while the Royal Institution of Chartered Surveyors reported that 78.5 per cent more surveyors recorded a fall rather than an increase in house prices that month.
Yet Savills' director of residential research Lucian Cook warned that gazundering can still prove perilous even in the current market, as there is a chance that buyers who try this may then the find the owner unwilling to sell to them as a result.
He suggested that the main rationales for gazundering are buyers having difficulty in getting sufficient mortgage finance that forces them to do lower their offer, or that negative market sentiment makes them question whether they are paying a fair price.
Mr Cook also argued that home information packs have failed to prevent this practice, or to stop owners from selling their homes to higher bidders at the last moment, as buyers do not generally refer to them, partly due to the omission of home condition reports.
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