Homebuyers who “gazunder” their sellers — by negotiating a lower house price than the one they have previously agreed, just before contracts on the property are due to be exchanged — could see it backfire if their mortgage lender carries out extra checks.
Kate Palmer writes for The Sunday Times that many buyers might be tempted to ask for a discount if they have yet to exchange contracts, especially if they are worried that house prices will fall because of the damage being caused to the economy by the coronavirus outbreak.
Aaron Strutt from the mortgage broker Trinity Financial told The Sunday Times: “Some may get caught out if they negotiate a better price because from the bank’s point of view, it’s a material change that might prompt them to carry out their checks again. Virus or no virus, if the transaction changes, the broker or conveyancer has to do the responsible thing and inform the lender.”
It is not unheard of for lenders to carry out checks at any point in the transaction, even if the buyer and seller have already exchanged.