Buyers lose out as gazanging hits the property market
The ups and downs of the property market have created a fresh problem for house buyers – gazanging.
The term has been coined to describe failed deals where a seller pulls out at the last minute because market uncertainty causes them to get cold feet or because they can't find a suitable home to move to.
Research from the legal property website, In-Deed, reveals that gazanging affected over 54,000 buyers in the first half of 2011 – up 20% compared to 12 months earlier.
This means buyers are now more likely to be affected by gazanging than gazumping – where sellers accept an offer only to change their mind and accept a higher offer from a third party - which only affected 15.3% of buyers in the first half of this year.
In-Deed's survey of 1,001 people found that 12% of sellers who pulled out of deals cited 'cold feet', while 28% blamed the fact they couldn't find a suitable property to move to for reneging on a sale.
"There has always been a minority of sellers who pull out of a deal at the last minute, but the uncertain market and poor consumer confidence have vastly exacerbated the problem, with an increasing number of sellers getting cold feet," says Harry Hill, the found of In-Deed.
There is little buyers can do about the problem as sellers have the right to pull out until the contract has been exchanged. However, efficient legal services that speed up the process of the sale can help as it reduces the time the seller has to change their mind.
From the Yiddish gezumph, meaning to cheat or overcharge, it describes the practice of a seller accepting an offer from one potential buyer but then accepting a higher offer from another buyer. In England and Wales, until contracts have been exchanged, the sale agreement is not legally binding and even though the original buyer may have spent considerable sums on the conveyance process, they have to either offer a higher price or risk losing the purchase. You can take out gazumping insurance where for a one-off premium of around £100 you’re covered for search fees, surveys etc up to £1,500 if you are gazumped by more than £1,000.