Effectively this means the reverse of gazumping, and again is not a swindle as such, this development is equally unhappy but this time for the seller. It is also less common than gazumping and arises when the prospective buyer waits until the last minute before reducing his offer. The seller is told that exchange of contracts can only go ahead if he will accept a much reduced figure. He is being gazundered when there is no real justification for the renegotiation.
Clearly prices are not fixed until contracts are unconditionally exchanged. And an offer may be reduced after extensive repair work or remedial treatments have been recommended by a specialist surveyor. The house may require major structural repair and the buyer feels it necessary to reduce his bid accordingly. Where legitimate that is not gazundering. But when a buyer realises that the seller is under pressure to sell quickly and takes advantage of this knowledge to reduce his bid for no good reason other than opportunism, that is gazundering.
As a safeguard a cautious seller client may want to keep a property on the market until contracts are actually exchanged. When under real pressure a seller may even decide to authorise his solicitor to put out two (or more) contracts at the same time, offering to sell to whichever buyer is the first to return the contract signed and cleared for exchange.
This is another situation we try to avoid by conducting all negotiations in a fair fashion and good faith. We will be open and honest within the terms of our instructions from the client.
This situation could be likened to
the uncertainty of buying at an auction. Given the right legal support there is
no reason why one need lose a contracts race (q.v.).