Preparing yourself for house price negotiation when looking to buy a new property has never been more important. Still, it’s a delicate balance. Do you offer more to secure your purchase? Or do you take a risk, knowing you could lose your ideal property?
The truth is that negotiation is an art rather than a science. But our tips will give you a better chance of getting a great deal when it comes to buying a house.
Know your market before you negotiate a house price
If you understand the property market where you’re looking to buy, you’ll be better armed to negotiate. Research local agents to check the price of comparable properties. Websites such as Rightmove can help you check the price that properties have actually sold for, rather than the asking price.
Estate agents work for the seller, not the buyer, but they can still be useful sources of intelligence.
James Andrews, Senior Personal Finance Editor at money.co.uk, agrees: ‘One of the key aspects of how to negotiate house price discounts is demand. If there has not been much interest, you can comfortably offer a lower bid when you start negotiating.’
‘Check property websites to also find out when the property was first listed for sale, and ask the agent how many offers it has had since then. The longer that the owner has been waiting to sell could mean that they are more willing to lower their asking price. If the property has had lots of viewings but no offers, ask the estate agent about why and use this knowledge to your advantage.’
Expect initial knockback
Ben Rowlands, from Lancashire, bought his first house at 33, and has since climbed the ladder with purchases of five properties around the North West. He says that if you can mentally prepare for rejection and persevere, you have a good chance of success.
‘I wasn’t desperate to get the prices down”, Ben explains. “I would have paid the asking price. But I’ve found that if you can expect rejection without getting disheartened, then you can really get somewhere.’
‘The trick is patience – people are often in a hurry. Be strong and hold your position, but also don’t set your heart on one property just in case.”
Ben bought his latest property in Todmorden, West Yorkshire in 2019. He managed to get the price down from £80,000 to £70,000 by putting in a much lower offer and ‘working up’.
He explains: ‘There’s no point offering 5% off and getting it accepted straight away. Start with 25% off the asking price and expect to be knocked back. Of course there’s always a risk. Ultimately it’s a matter of trying your luck, but it’s worth it when you’re talking thousands of pounds!.’
Check for ‘big ticket’ items
There are also more specific tips to help you negotiate. One is to search the property for ‘big ticket items’ like the boiler, electrics, and windows. You can reasonably lower your offer if they’re not in perfect working order.
‘Although it’s easy to get swept up in the excitement of a new property and the ‘love at first sight’ mentality, you should also view the property thoroughly and look out for any work that needs doing;” says James. “This is an opportunity to knock more money off the asking price. Estimate the cost of any work required and take this amount off your offer price.’
Play to your strengths
Some buyers are especially in demand with sellers. For example, if you’re not dependent on selling your existing property to purchase a new one, make that clear during your negotiations. You may be a better bet than a buyer offering a bit more cash but stuck in a long chain.
James continues: ‘Make sure you have a mortgage in principle before you embark on your property search, as this will likely lead estate agents and sellers to take you more seriously. Often a seller is more likely to accept your offer than one from someone without a mortgage in principle, so this helps your bargaining position massively.’
‘If you’re chain free or ready to move fast this is a huge advantage to a buyer, as it means they can be confident about their purchase too.’
There may even be scope to make a personal connection with the seller. Is your family dynamic similar to theirs – can you make them identify with you?
Successful movement on your house price also comes from knowing what not to do.
It’s best to avoid:
- Setting your heart on a single property
- Letting sellers know your maximum budget
- Letting the fear of failure stop you from trying
Hannah Bashford, from Model Financial Solutions Limited, says there’s less space for house price negotiation in today’s seller’s market. Although it shouldn’t put you off entirely, it should be considered when you’re deciding how far you should haggle.
She says: ‘Most people expect to put in an offer and have to revise it, but in the current market, there’s so much demand that estate agents often ask for ‘best and final offers’ by a certain date. In cases like this, there isn’t much room for negotiation.’
James Andrews, echoes this sentiment: ‘Most importantly of all, be prepared to walk away. There will always be another home to buy, and new properties come onto the market every week. The power is always, ultimately, with the buyer – no matter how it feels sometimes.’
With thanks to David Prosser for his contributions to this article.