DEFINITION of ‘Gazunder’
A colloquial term used in the United Kingdom for the practice of a buyer lowering his real estate purchase offer below his previous offer when the transaction is already well under way. A gazunder typically happens when the market is weak and/or when the seller is coming from a position of weakness. “Gazundering” is not illegal, but many people consider it unethical. The seller may be forced to accept the lower price if it is a better option than continuing to pay the carrying costs on the property or continuing to hold it in a declining market.
BREAKING DOWN ‘Gazunder’
In a related practice called gazumping, a seller coming from a position of strength will raise the sale price of a property above the price that was previously agreed upon when the transaction is already well under way. A seller may gazump if he thinks the buyer will remain committed to the purchase even at a higher price or if he has received competing bids and can fall back on another offer if the first buyer walks away. Gazundering and gazumping are not possible in the United States, since contracts formalizing a property’s purchase price are signed at the beginning of the real estate transaction.