Gazundering is a distasteful by-product of a falling market. It is not very nice and it is hardly moral. But it isn’t illegal. Some buyers may try to take advantage of a vendor under pressure to sell or may genuinely feel that a property is, towards the point of exchanging contracts, worth less than the original agreed price. Naturally a buyer would rather not pay more than the property is worth. From an ethical point of view there is no difference between gazundering in a falling market and gazumping in a rising market. Both practices are largely designed to take advantage of an extreme market and a cornered buyer or seller. It just depends which foot the boot is on and if someone is prepared to put that boot in.
Handling a cynically motivated reduced offer is a delicate matter. But this is where an experienced estate agent scores against an inexperienced one. The experienced agent is more likely to have valued the property correctly in the first place and will have briefed the client about the likelihood of gazundering. Because of accurate pricing there may well be more than one possible buyer, thus putting the seller in a stronger position and making him less likely to have to take a lower offer later in the transaction.
An experienced agent will explain to potential buyers that he is fully aware of the practice of gazundering, and will advise his client against bowing to such blatant opportunism.
Prices do not usually drop at a rate that should materially alter the value of a property over the duration of an average transaction. It might be that a rather high offer was made in the first place. Perhaps a mortgage valuer has recognised an over-inflated purchase price and has down-valued the property, thus affecting the borrowing ability of the buyer. Utimately the whole process is deeply rooted in the correct price being asked and paid.
Under the right conditions there should be no need to change the price once it has been agreed, and a would-be gazunderer or gazumper would then be described better as a bully - and we all know what we should do with bullies!