Polly Greenway, Director of DOMVS, advises caution at a time when the market is showing a robust return after lockdown.
Some buyers have been sharpening their pencils, anticipating a fall in property prices following Covid19. The early indications are that pencils can be pinpoint sharp but it might not mean a lowering of prices, or that lowball offers will be accepted. Early signs are that there is a great deal of demand in the market across all price sectors and property types.
But still, there have been cases of gazundering: this is the practice of a buyer reducing an already agreed offer to buy a property – often when only weeks or even days away from exchange of contracts.
Gazundering might follow a serious and understandable concern about a property’s condition following a survey, or genuine worry – backed up by market evidence – about a local or regional house price fall.
But sometimes, gazundering is used as a form of tactical coercion. It is not blackmail. It is not illegal. But it’s not nice and it does leave a very nasty taste in the mouth.
Our long experience tells us that gazundering can also heavily backfire on the buyer. It is not uncommon for a seller to pull out of a deal in anger. But that is not all. Today there is another concern. A late-in-the-day price change means a mortgage lender might recheck the buyer’s financial position. If new circumstances come to light – and, let’s face it, Covid19 has badly affected millions of salary and wage earners – a mortgage offer could be adjusted or even withdrawn entirely.
So when buying a property AC – after Covid19 – just as at any other time, caveat emptor – let the buyer beware.