Negotiating property prices can be daunting, especially for those with little sales experience.
Sure, it may feel awkward, but a bit of haggling is part and parcel of buying property. Although securing a dream home at bargain basement rates may be a long shot, you can certainly aim to get a better deal than the initial asking price. Knowing what to say, and when to say it, however, is only part of the process.
There’s more to house price negotiations than that.
This can be difficult for many homeowners to get their heads around, but it’s vital if you want to be taken seriously in negotiations: You need to sell first.
A frequent response is, ‘But, I don’t want to be homeless!’ It’s a common fear, but it’s an unwarranted one. Just because you’ve ‘sold’ your home doesn’t mean you’ll have nowhere to live. All you’ve done is accept an offer on your property. You haven’t physically moved out.
For a really deep dive into all the reasons why selling first makes sense, check out our post on the subject: Should I Sell My Property First?
Do your homework
It’s a simple statement, but a crucial part of the property purchasing process is carrying out some research before making an offer.
So, what sort of things should you be looking at? Well, you can go down a deep rabbit hole if you wish, but it isn’t entirely necessary. In fact, you can base negotiations around two key points: Market value and demand.
Market value can be done by simply looking at all the main property portals and your local estate agents. Find similar properties in the same area and look at how they stack up against the home you’re interested in. Take into account things like:
- Potential to extend
- Amount of bedrooms and bathrooms
- Approximate gross internal area of the home
Demand can be a little trickier to ascertain, but not impossible.
Your first step can be taken while researching property prices. Most portals will have a listing date stating when the home first went to market, so jot this down when checking the price. A home that has been on the market for a while will likely have less demand and could be ripe for negotiation.
Sellers have put their property on the market for a reason, so they may be willing to drop their asking price if they’ve been getting few bites and have already waited long enough. Ask the seller’s estate agent how many offers the home has had to get an insight into the property. If there has been plenty of interest but no takers, follow up with questions asking why this is the case.
The more information you can gather now, the better placed you’ll be to negotiate later.
Take everything into account
While it can be easy to concentrate on just the bricks and mortar, it’s a mistake to do so.
There are plenty of other bargaining points to consider. Take into account things like the electrical wiring; boiler condition, brand and age; whether or not there’s double glazing present; the state of repair the roof is in, etc. All of the above will cost you money when you move if they’re not up to scratch, so use them to your advantage when you discuss the property’s asking price.
You can even get quotes in advance to give you a ballpark figure to negotiate with.
Make your position clear
Not all buyers are created equal.
If you’ve got something to shout about, make sure you do just that. Sellers want action from first-time buyers, people moving with no chain, cash buyers, etc. If you have an advantage over the competition, use it.
Other buyer’s in the hunt for the same property won’t hesitate to, so you shouldn’t either.
Don’t fall in love
This is a tough one.
Finding a property you adore can take time, so when that dream home appears it can be easy to fall head over heels with it. But, you shouldn’t. Falling in love with a property you’re trying to buy will likely result in you paying more, not less.
Save the property love affair for after you move in.
Keep your cards close
Following on from above, if you do find a property you feel is a ‘must-have’, keep it to yourself.
In fact, you should probably even go one further. Tell the agent and vendor you have other properties to view. Play it cool.
Same goes for revealing your budget. Sellers and agents will try and get you to open up, but it’s in your interest to be cagey. Let that slip and you increase the likelihood of the figure you end up paying being a lot closer to your top range than it would be if you said nothing.
Negotiating is a game, and you need to play to win.
This is a common tactic, and for good reason.
Once you’ve made an offer, you can only go up from there. Starting low gives you extra wiggle room, but it’s more of an art than a science. Most will tell you to offer a standardised 10% lower than the asking price, but we think you should be more flexibile than that.
If you’ve done your homework, you’ll have a greater feel for how the property has been priced and how keen the sellers are to actually get the property sold. Use these as your guiding lights, not an arbitrary percentage. Some properties will warrant a 25% lower initial offer, whereas others may be better suited to 5%.
No two property transactions are the same, so don’t treat them as such.
Finding the right property can be a long process, so patience plays a critical role.
Human nature dictates that when we see something we love, we want it straight away. However, when it comes to buying property, especially if you’re trying to get the home at the best possible price, resisting the urge to rush things is the prudent way to proceed. It’s also important not to fall into the trap of believing the right home will never come along.
They always do, eventually.
Be prepared to walk away
Our final point takes the above section on patience to the next level.
Sometimes, you might find the right home, but not at the right price. Being prepared to walk away from the start puts you in a stronger position when you negotiate. New properties hit the market every week, so play the long game.
You may regret it if you don’t.
If you’re thinking of getting into the property market in or around East London and West Essex, Petty’s should be at the top of your list of estate agents to call.
We have been helping people just like you buy and sell their homes in the capital since 1908, so we know a thing or two about the local area. Our expertise and experience mean our clients enjoy smoother moves and encounter less stress throughout the entire process. Who doesn’t want that?
Give our friendly team a ring today to find out how we can help you get what you want from the property market, regardless of whether you are buying or selling your home.
Francesca has been with Petty’s for seven years and has progressed to become our Office Manager, overseeing the daily events and planning what lies ahead for the team each day. She is an F1 obsessive and loves dogs...there are eight pooches in her immediate family!020 3370 8789 / Email Directly