Noticed over at Mark Wadsworth’s place. This:
Is gazundering fair game? Selection Votes Yes 86%
251 No 13%
38 Other, please specify. 1%
3 292 votes total pollcode.com free polls
I left a comment over at Mark’s that sums up my attitude to gazundering (and gazumping).
Both gazundering and gazumping are unethical practices. If you’ve agreed a price, then you should abide by it. If you think the price is wrong, negotiate before agreeing a price, not when you think you have the seller or buyer over a barrel.
Neither can happen in France and quite right too. The price is agreed and legally binding on both parties when the property is taken off the market and the sale agreed. There’s plenty of time to negotiate a fair price up to that point and after that is too late.
My response to a gazunderer would be the same as my parents’ was when someone tried it on them – No. You agreed a price and that’s it. Frankly, I would then insist that it went up before I agreed a new deal – a couple of grand to teach the bastards a lesson. If it meant going back to the market even for an extended period, I’d do it before giving into a gazunderer.
All this tells me is that there are a lot of highly unethical people out there – but I knew that already.
While I note Mark’s valid point made regularly at his place about prices being too high (they are) – this is not the way to deal with it. The time for negotiation is before the sale is agreed, not minutes before exchange of contracts. That is little more than blackmail, hoping that the seller is in no position to refuse. My parents were prepared to call the sale off and wait for another buyer, so it didn’t work on them and the buyer backed down. Personally, I’d have called the sale off and insisted on a higher price, frankly, to drive home my displeasure, but I’m not as kind as they are – and to make the point that two can play that game.
Exactly the same applies to gazumping – and gazunderers who use the erstwhile practice of gazumping when the market was buoyant as some sort of excuse are merely engaging in the tu quoque fallacy. Both are bad behaviour, both are unethical and both could easily be stamped out with a sensible approach to property purchase. The French system is effective and stable. The house is put on the market and the buyer makes an offer. Negotiation takes place. When buyer and seller agree a mutually agreeable price, they sign an agreement for the sale and the buyer puts down a 10% deposit. This is, for the most part, non refundable. There are some exceptions – usually a failure to secure finance, but other clauses can be written in by agreement of both parties. Once that agreement has been signed, that’s it. A completion date is arranged and everything goes through on that date for the price agreed. The UK system is positively primitive compared. It’s also worth bearing in mind that the French market is not as volatile as the UK one.
Few things make me as hopping mad as gazundering as it is blackmail by another name. So, too is gazumping. This poll merely confirms my worst suspicions about people unfortunately.
I sold my last property in the U.K. nearly a year ago, the 1st ‘ buyer’ foo led me about for over 4 months before trying to gazunder me, I told him to get lost, the very next day, thanks to the estate agent who really did know the business, I got a better offer and we completed in 6 weeks.
After all of the time wasting it was a pleasure buying a property over here, the Notaire had it done and dusted in under 2 months, both myself and the seller are happy see each other socially, I really like the way the property market works over here, none of that confrontational each must have a solicitor rubbish, I have been told on very good authority it is the Law Society who decides how much conveyancing must cost, and have the Solicitors over a barrel as Insurance is many times more expensive if sought out side of the Society; as for the amorality of the U.K. public, look what happened to Rome.
If a buyer is prepared to behave in that unscrupulous manner, I would just show them the door. It would tell me everything I need to know about how easy and pleasant the process of completing the sale would be, i.e. not all at – that kind of buyer can delay the process for weeks over monumental and labyrinthine quibbles about lightbulbs and curtains and dates. So even setting ethics aside, self-interest should dictate a firm No. (Can you tell I still bear the grudge? In a curious aside, I learnt today that the male buyer absconded to Thailand for a bit of exotic fluff and then had a heart attack. Lightbulbs. Grrr!)
Er, Longrider,
I always thought a ‘Guzunder’ was one of these.
Seriously, pitching a ridiculously low price to a seller always means to me said buyer will be shown the door and not allowed back in. At any price.
The time for negotiation is before the sale is agreed, not minutes before exchange of contracts.
Ah yes but that’s called ethics, LR.
John, quite. Our purchase was simplicity itself.
James, indeed.
We are currently trying to sell our French property – not very hard, I might add. The French market is as depressed as the UK one. If I manage to sort out work in the next couple of months, I’ll be taking it off the market and keeping it on as a holiday home for the immediate future. Anyway, that said, we are asking what we paid for it in 2003. Like the UK market, the French one went up and then down again, just not so dramatically. We have had one offer of €30,000 below the asking price. This is taking the piss. We are asking a fair price and have allowed a few thousand euros for negotiation, but I fail to see why I should subsidise a buyer to the tune of thirty grand and I won’t.
That was the end of that…
I, too, am pissed off with the confrontational approach to property sales in this country. It brings out the absolute worst in people and gazundering epitomises it. I’ll not go along with it.
What do you call gazundering? If you mean when you (as a buyer) have agreed a price, and then at a later stage in the legal proceedings you say ‘sorry i’m pulling out unless you reduce the price’, then I agree, its unethical, and people who do it should be shown the door.
But if you include people who make low offers, hoping that the sellers are desperate, then I disagree. Thats just the market in action.
Jim, gazundering is the former. That said, a ridiculously low offer hoping that I am desperate gets shown the door, too. That is the market in action as well 😉 I have no problem with the latter as I can just say no and have done so. The former is an attempt to use the leverage created by the pressure of contract exchange and everything in place along the chain to force a lower price. Highly unethical and time the UK adopted practices used elsewhere that prevents such behaviour.
Thanks for link and continuing the debate.
While I agree that waiting until five minutes before exchange to reduce offer is a bit shitty (it once happened to me), the period between making an offer and exchange can drag on for weeks or months, so what if somebody makes an offer which is accepted and reduces it a week later?
The problem is England’s unbelievably dumbass house purchasing system. Both gaz problems disappear if England had a logical system that means that when you make an offer, includingg things like “if I can’t sell my house I can’t buy yours” you sign it. If the seller excepts, they sign it and then you both have a binding contract. The seller might add “you have a month to sell or it is back on the market”, etc. It is a negotiation until both parties agree the terms. Light fittings, pool cleaners, etc., are part of the contract. Once agreed and signed by both parties, pulling out attracts significant penalties.
This is the system in South Africa, and, as I understand it, is more or less the system in Scotland.
It is frankly beyond belief that such a major purchase / sale in England is not binding right up to the point of moving in. Thankfully, we shall never go through the process ever again.
Mark, it would be equally unethical. Once you’ve agreed a deal, only major unforeseen circumstances should be reasonable cause for a change in the price. I’m all for a binding contract once negotiations are concluded – along with a deposit like the French system. Actually, this would be achievable without any legislation – all it needs is for sellers to have a contract drawn up and sale conditional on signing it. DocBud’s comment sums it up nicely, I think.
I THINK this sort of nonsense is illegal in Scotland, as well …..
I believe that’s correct.
Here’s hoping you manage to hang on to your place in France LR.
At least that way you keep you dream alive, albeit postponed.
Never had any gazzing problems myself, but have been apalled at the way prices went up from about 2000 up to the credit crunch. In my opinion they still have a fair way to drop before they become reasonable again.
I do not envy anyone presently in education when I think of the probability of them ever affording their own home.
Our end of the market never went to the silly levels of higher value properties in the first place. It’s currently worth about the sort of money we could have expected in about 2003/4.
Interestingly, there are a couple of places up for sale. One was priced at £150,000. It dropped to £140,000 and an offer was made of about £135,000 which was refused. It’s still on the market. I can only assume that this is as low as the vendor can afford to go. Given that, the market will continue to stagnate.
Best you give me a clue about your “end of the market” before I start screaming “Owmuch!!!”
Along the lines of what you expect to get for your c£150K.
Size, garden size, garage, that sort of thing.
First time buyersville. Two or three bedrooms, garage, drive, front and back gardens on the outskirts of Bristol.
Our French property is a similar value but is larger, three beds as opposed to two and with 1000 square metres of garden.
Our Bristol property probably peaked at about £165k in 2007/8. Current value is probably £140k. In other words the UK average.
Still an awful lot to be laying out LR.
I paid £47K for a 2 bed, front back and side garden (enough room to build a double garage) with loft conversion in 1998. A couple of grand under its value because they were anxious to sell.
Since then prices have just rocketed. Had I waited a couple of years, then no way could I have afforded this.
It’s probably “worth” about £115K now when by rights it should be worth less than £90K.
I keep getting reminded of the old Alf Garnett rant about his “Arhhse” being worth 20 grand (20 bladdy graaand).
Yes, in 1998 ours was worth about £40k – £50k. I expect the person who owns the one currently up for £140k simply cannot go down any further. If sellers can’t move down because they need that amount to buy another property, nothing moves. What matters is the differential rather than the top figure for those in the middle or towards the bottom of the chain. Those leaving the market at the top have to drop first – and if they need a certain amount to do what they want to do, then they won’t and that’s it.
My MIL was able to drop nearly £100k on the estate agent’s original valuation of her property as she was able to negotiate a significant drop from her seller and so on. She was fortunate.
In the end, though, what something is worth is a combination of what someone will pay and what the seller will agree to let it go for. The current stagnation is because those two cannot meet in the middle. What I suspect will happen is that the stagnation will remain for some while yet. Prices won’t drop dramatically, inflation will slowly catch up. When a first time buyer property is around three times median wage, things will start to move again.
I see what you mean LR and hope that you are correct in your conclusion. That sounds like quite a long stagnation though.
I bought at 3.5 times my annual wage at the time – about as much as was recomended back then and it almost crippled me.
I think it will be and not just here. France is equally stagnant as it was relying heavily on British buyers.
Yup, me too.