How to negotiate the best price when buying a property.
Here's a list of tips and tricks that will help you negotiate the best possible price for your new home.
Do your homework
A little homework before you make an offer can give you an insight into how eager the seller is to sell.
You may discover that the seller needs to move quickly. Perhaps they already have an offer accepted on a property they want to buy. They might be open to a lower offer.
Some of the following questions can be answered by looking at the property's particulars on the portals (Rightmove, Zoopla etc.). However, you also can ask the estate agent:
- How long the property has been on the market?
- Whether the seller has made an offer on another property and is anxious to move?
- How much interest the property has had?
- Have there been any other offers?
- Whether the asking price has been reduced at any stage in the past?
- What date the seller would like to complete by?
Investigate the selling prices of similar properties in the area. This is especially helpful if the property has been on the market for a while, or has had lots of viewings but few offers. It could mean it’s overpriced compared to others like it. How quickly are comparable properties selling?
If the asking price appears so high that it has been deterring buyers, it puts you in a stronger position. You can use examples of similar recently sold property prices as the basis for your offer.
Be as ready as possible to proceed
The seller is more likely to accept a lower offer from you if you can move quickly. Tick as many of the following boxes as you can before negotiating:
- Get a Decision in Principle (DIP) from your mortgage lender
- Instruct a proactive conveyancing solicitor in advance of finding a property
- Demonstrate you can meet the seller’s desired completion date. If the vendor is after a quick sale, being ready to proceed will make your offer more attractive.
Are you a cash buyer?
If you are a cash buyer, then you may hold a trump card in the negotiating process.
With no mortgage to secure, there is no risk of the deal falling through as a result of the lender refusing to lend. The conveyancing process will also be quicker as the solicitor will not need to carry out any legal due diligence for the lender.
Does the property need work?
Even before you carry out the survey, if you can demonstrate any issues that you feel are not reflected in the asking price, point them out and use them to negotiate.
Things to look out for include:
- The condition of the windows
- The age of the boiler
- Décor or fittings that are tired or dated
- Obvious issues with the roof
Don’t appear too keen
You should certainly demonstrate that you appreciate the seller's home and would care for it as much as they have. Appealing to the seller’s sentimental side may even help persuade the seller to choose your offer over another.
However, If you are overly gushing about the property to the seller or agent, they will feel more confident about the asking price.
If you meet the seller during a viewing, try to make a personal connection without declaring that you’ve found your dream home and would give anything to live there.
Keep your budget to yourself
Don't disclose your maximum budget to the estate agent. The agent works for the seller, not you. If you tell the agent the maximum amount you are willing to spend, you will undermine your negotiating position.
Start with a low initial offer and keep your cards close to your chest.
