How to negotiate the best price when buying a property
When buying a property, you should be placing yourself in the best possible negotiating position. What do you need to do?
Investigate the position of the vendor
This will give you an indication of how keen they are to sell, or in other words how open they might be to lower offers. The estate agent can help you.
It’s useful to know:
- How long the property has been on the market
- Whether the seller has made an offer on another property and are consequently keen to get a move on
- How much interest the property had, both number of viewings and 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. 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 over priced compared to others like it.
- The asking prices of similar properties in the local area?
- How fast are comparable properties selling for?
If the asking price appears too high and has been putting people off, this puts you in a stronger position. You can use examples of local property sale prices to demonstrate this when you make 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 mortgage agreed in principle
- Engage a reputable, proactive conveyancing solicitor in advance
- Demonstrate you can meet the seller’s desired completion date
If the vendor is after a quick sale, being ready to proceed will work in your favour.
Are you a cash buyer?
If you are 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.
Does the property need work?
Even before you carry out the survey, if you can demonstrate obvious issues that you don’t feel are 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
If you gush about how much you adore the property to the seller or their estate agent, this will make them more confident about the asking price.
There is a balance to be struck here, however; demonstrating that you appreciate their home and would care for it as much as they have may appeal to the seller’s sentimental side. It may even be an incentive for the vendor to sell to you.
If you meet the seller during a viewing, try to make a personal connection without declarations that you’ve found your dream home and would give anything to live there.
Keep your full budget to yourself
As far as the estate agent is concerned, play down how much money you are willing to spend. The agent works for the seller, not you, and if you let them know how high you could go you’ll undermine your negotiating position.
Start with a low offer and keep your cards close to your chest.
In summary, knowledge is power when buying a property
- Find out the seller’s position
- Ascertain their ‘ideal buyer’ profile
- Compare their property to others like it
- View the property thoroughly to find any defects to haggle over
If you are ready to make an offer and have armed yourself with as much knowledge as possible, you’ll be in the strongest possible position to negotiate.