Gazumping and pre contract deposit agreements

Gazundering - offering a reduced price on a property just before exchange of contracts is due to occur.

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Gazundering - or getting a last minute price reduction

Under English law, the price you agree on when buying a house is not final until contracts are exchanged. Up until that time the buyer has the right to cancel the agreement and buy a cheaper property When the buyer demands a price drop at the last minute (usually to compensate for declining house prices in the area), this is called `gazundering'.

Some people don't feel gazundering is an ethical practice, but it is completely legal in England and Wales.

If you decided to make a lower offer at the last minute just before change of contracts you could lose the cost of your survey and any legal fees already paid - but you could save several thousand pounds if house prices have fallen during the purchase process and your reduced offer is accepted. If the seller really wants to sell, he will comply with demands for a fair discount at the last minute.

You have a better chance of gazundering and having a lower last minute offer accepted if:

If you do try gazundering make your reduced offer some time during the 24 hours prior to the planned exchange of contracts.