It refers back to "renegotiated downwards" in your text. Basically, it's where the buyer tries to obtain a last-minute reduction in the price after having initially agreed on a higher price, before the deal goes through - in other words, the buyer "chips away" at the price in the hope that the vendor will still want to sell. It's a gamble from the buyer's point of view, because the vendor may refuse, but especially where market conditions are poor there's a chance that the vendor may accept (and of course this is what the buyer hopes). See the following definitions:

Chipping Knocking down the price just before exchange (see Fish and chip-er)

Chip and pin To chip away at the price, and pin down the vendor to get a bargain.

Fish and chip-er Someone who fishes around for a cheap property and chips the price before exchange.
http://www.telegraph.co.uk/property/3361937/Property-market-...

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Note added at 1 hr (2008-12-15 11:07:35 GMT)
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Also humorously known as "gazundering" (by analogy with "gazumping"). See also:

Gazundering is back (...)
Russell Hunt, who runs the London-based buying agency Property Hunt, says almost all of his clients ask him to consider reducing their offer at the last minute. “About two or three weeks before exchange, we may consider **chipping the price**,” says Hunt. “People are trying to knock money off everything all the time.”
http://property.timesonline.co.uk/tol/life_and_style/propert...

What is Gazundering/ Bid and chip?

Gazundering is a practise whereby the purchaser of a property threatens to pull out just before exchange of contracts if the vendor doesn’t reduce the price.

Why do buyers use this method?
Selling a property can be expensive, and in most cases, the longer a property is left on the market for, the more costly it can be for the vendor. The vendor may be in a middle of a property chain, so he/she could be relying on the sale to keep the chain together. Alternatively, the vendor might be in a financial rut, consequently relying on the money to pay off debt. Buyers that try gazundering on a vendor may be aware of those circumstances, so may try their luck. If the vendor is in a position where they need the sale, unfortunately the dirty tactic may serve well and save the buyer a lot of money.
http://www.propertyinvestmentproject.co.uk/blog/2007/09/26/g...