As the property market gets a bit more bearish you can expect a new word to enter news columns and it is ‘Gazundering’ or ‘Reverse-Gazumping’.
First of all we’ll explain Gazumping which happened when we were in our property bull market (the one that clearly ended in 07′). To gazump a person you would basically make an offer on a house that his higher that what the seller went ‘sale agreed’ at, so if you saw a house you wanted and it was already gone you would call up the estate agent and offer more than the current buyer did, doing this is unethical but not unthinkable, and the estate agent is in a bind because if the client found out they got a better offer and were not told about it they might not be too happy about it!
However, most sellers would be happy to honour their word and go through with the first buyer, but then there are those that just want more cash. When you buy a property you generally sign a contract but the contract is not binding until the seller signs it, and up until then they can basically up-sticks and sell to another person who will pay more. That’s Gazumping.
Now enter Mr. Bear, and he has his own traits, one of them being ‘Gazundering‘ and this is where you drop your price before buying. In th U.K. you often hear of sales falling through because they are in a ‘chain’. The definition in the link above is not a 100% fit to the Irish Market, because in the U.K. you sign the contract on the day of the sale, in Ireland you do it well in advance, however, what you can do is go sale agreed, find out if the other person is trying to buy something else, or find out if they are hard up for money and then hold out for about three weeks during which you were meant to have signed the contract, then simply say you have changed your mind and offer less.
This puts the seller in a predicament, do they re-list the property and maybe get lower offers anyways or no offers? Do they keep paying the mortgage on a property they may have vacated, do they lose the property they signed for (if they are buying another)?
The property industry – for the most part – works on honour and integrity and while an estate agent may advise the client to get another buyer instead of dealing with a person who behaves this way the seller may have no choice or may just want out as soon as possible and in that example the Gazunderer will gain.
If you decide to Gazunder a person bear in mind that there is a real life person on the other end with a life and hopes and concerns the same as the rest of us, gazundering is unethical but its not illegal. I suspect that we will see some of this going on in the near future and it will be newsworthy on the basis that for the first time in a decade people are getting away with dragging a price down, maybe that’s just part of the nature of a buyers market.