How to haggle on a house price
While for some buyers it makes sense to hold tight and see, for those who just need to move house – it's time to put your haggling hat on to make the most of this uncertainty.
Information is power in the negotiating process, so arm yourself with as much detail as possible about the property, vendor and any potential competition. If possible, talk to the vendor in person – find out why they're selling, what their plans are and what sort of time frame they are working with. Whether they have a property lined up is key – if you're ready to move now, but they haven't found anything yet and aren't in an immediate rush – this will affect the price they are likely to accept.
In the same token, if they've found the property of their dreams, had an offer accepted and want to be in before the school term starts for example, this completely changes the negotiating terms for you and they are likely to be more receptive.
Try and find out how long the house has been on the market. Issues such as already reducing the price and previous buyers that have pulled out could all affect your stance. In such situations a lower offer could be snapped up with relief by the vendors.
It is hard to make sense of the varying nationwide house price reports, and to be honest – they may not apply to your specific area anyway. Instead concentrate on the local market, how does the price compare to similar properties for example? Find out recent sale prices on sites such as Zoopla.com – this can help ensure you don't pay over true market value, yet bear in mind there can be many variables not detailed that affect prices, such as extensions or loft conversions, for example.
Your situation is just as important as the vendors, so make your position clear – particularly if it is favourable. If you're a first-time buyer or not in a chain that's a huge bonus, as is being a cash buyer or having finance firmly sorted with a mortgage-in-principle, for example.
Make your stance known to both the estate agent and vendor - it shows you're keen and ready to get the process moving, and could swing a decision if your favour if there is competition for the property. Also make it known that you've done your market research as well – no one likes a smart-arse, but demonstrate that you know what the property is worth in the current conditions.
Keep it friendly
Yes, we're dealing with large amounts of money in the property game, but there's no need to play dirty – it will most likely backfire as vendors could choose not to sell to a buyer they do not like. The relationship begins as soon as you contact an agent or view a property, so be personable and friendly to get on good terms from the outset.
A strong relationship is key and could work in your favour further down the line if the vendor has a couple of offers on the table, and it can reduce the likelihood of getting gazumped.
Never forget that the estate agent is working for the vendor and trying to get them the highest price to maximize their commission. This means while it's crucial to be friendly, try to be firm and maintain some control in the process by keeping in contact to know what's going on. communication channels open by frequent contact.
Where to start
If certain fixtures and fittings are included in the sale or on offer for you to buy separately, consider whether they are worth it. If you want them, get the particulars in writing now to avoid quibbles over curtains at a later date.
It is normal for vendors to price property slightly higher than they expect to get, so haggling is generally expected. Your opening offer is important as it will determine how much you eventually pay.
Opening offers are often about 5-10% lower than the asking price, but this is a very basic guide. Taking account of all the previous issues should indicate whether the asking price is reasonable and how much you feel you can go in below it.
If a counter offer is made, you'll need to weigh up your position and that of the competition. In the current market, you may be able to stand firm and raise relevant issues that support your offer, such as the cost of necessary repairs. Remember that time is on your side, so don't rush into a deal you're not completely comfortable with.
If you make an offer in writing (after the initial verbal offer, but usually before having a survey carried out), make sure you write 'subject to contract' on the letter. This gives you protection in case you are forced to withdraw for any reason - or decide to renegotiate the price following the survey.