First-time buyers could turn to 'gazundering'

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First-time buyers could turn to 'gazundering'

Tue 21st Nov 2006

With first-time buyers facing the prospect of rising house prices and increased mortgage rates, they may feel it is time to begin 'gazundering' house price offers says Capital Economics.

Gazundering is the term used to describe the process by which at the moment just before contracts are drawn up, the potential buyer lowers the price offered in a bid to secure a cheaper deal.

Yorkshire Bank's recent research discovered that a third of first-time buyers would consider adopting the practice when attempting to reduce the offered price on a property.

Ed Stansfield, economist for Capital Economics, stated that first-time buyers "are stretching themselves very heavily in order to get on the market, so if there is anything they can do to reduce the final price I guess they've got an incentive to try".

He continued by stating that: "If a first-time buyer feels that they're in a position where there is insufficient competition for the house then they’ve got the upper hand in the negotiations."

Gazundering is a practice that first-time buyers must be wary of however because should the seller turn down the offer, the whole sale could collapse completely.

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