Sarah was excitedly packing up to move out of the terraced house her family had outgrown to a four-bedroom home in the countryside.
But the day before exchanging contracts the buyers of her house dropped their agreed offer by £15,000. “It was awful, your heart just drops to your stomach,” says Sarah, not her real name.
She had fallen victim to gazundering, a rare but growing problem in the property market in England and Wales, according to the Conveyancing Association, external.
It is calling for government reforms aimed at tackling this and other house buying and selling issues to be brought in “without delay” instead of 2029 as planned.
For Sarah, her husband and two children their move had all been going smoothly.
They were selling the three-bedroom terrace they’d renovated and buying her parents’ four-bedroom detached house in the countryside.
But the day before contracts were exchanged Sarah received a phone call from her “befuddled” estate agent saying he had some bad news.
Their buyers said they’d done some more research about the area and would now offer £15,000 less than the price they’d agreed.
“I can’t even begin to go through the financial consequences [if we lost the sale],” she says.
If they accepted the lower offer they would be out of pocket but if they refused there would be costs too.
“We had already paid one set of legal fees but would have had to pay again if we needed a new buyer. We’d also paid the removal fees already and would have to pay again if we cancelled the moving date,” says Sarah.
Gazundering is when a buyer lowers their agreed offer just before contracts are exchanged.
It puts a seller under pressure to accept the lower price or risk losing their sale and collapsing their property chain – potentially losing the house they want to buy.
It is possible because in England, Wales and Northern Ireland an offer is not legally binding until parties exchange contracts. Once an offer is accepted it takes an average of 120 days to complete. One in three house sales fall through before exchange.
This costs sellers £400m and the wider economy £1.5bn each year, according to the Ministry for Housing, Communities and Local Government.
Planned government reforms would cut that time by four weeks and save the average first time buyer £650, it says.
After speaking to her dad and husband Sarah decided to put her house back on the market that same day.
The next day, her buyers “went running into the estate agent’s office saying they were happy to proceed with the agreed sale price”, she says.
“Gazundering is actually awful. It’s not just a business deal. It’s my children’s home and the fact that nothing’s been done about it is ridiculous.”
Beth Rudolf from the Conveyancing Association says gazundering is a small but growing problem.
“It’s not actually that big, it doesn’t happen very often [but] it’s started increasing though because of the change in the property market that’s made it a buyers’ market.”
There are more houses on the market than people looking to buy, she explained, which means sellers face stiffer competition, forcing them to lower prices.
The government has put plans in place to reform the house buying and selling market in England and Wales which would tackle issues like gazundering although at the moment the timetable for those reforms, external is by the end of the current parliament in 2029.
The Ministry for Housing, Communities and Local Government told the BBC: “We’re stopping gazundering by introducing legally binding agreements that prevent buyers from walking away at the last minute without a valid reason, with fines for those who do.”
