Are you hoping to get your next property for a bargain? You may be surprised at the competition among buyers, but there are ways of negotiating. Here’s our top tips for house haggling.
You might think that now is a good time to get a bargain if you’re house hunting, but you could be wrong. The property market is currently buoyant, with July seeing a 1.7 per cent increase in house prices. Even though some analysts are concerned about the future of the market when the furlough scheme ends on 31 October, prices are now holding firm and competition among buyers is rife. Analysis by estate agent Knight Frank has shown that, while discounts are still being negotiated due to the pandemic, sellers are staying strong.
‘Demand has soared, but part of this demand is from existing homeowners looking to sell their property in order to buy a new home,’ says Phil Leivesley, Sales Manager at MB Associates. ‘This has ensured there is a reasonable supply of properties to buy, which has kept prices in check. Without this, it’s not unthinkable that we would have seen a surge in pricing.’
Competition among buyers for properties is intense, partly because many buyers are now seeking outdoor space after months of being cooped up indoors during lockdown. The Stamp Duty holiday has also boosted the market. In July, offers were accepted at 98 per cent of the asking price on average.
Estate agent Knight Frank says that buyers have been taken aback by the competition they have faced in recent weeks. Many were presuming they would get a bargain and be able to negotiate, but it’s not automatically guaranteed in the current climate.
However, that doesn’t mean you can’t try to negotiate on a property. Here’s how to improve your chances of securing your dream house and still get a good price…
Know the prices in the area
How does the property you have in mind compare to other similar homes in the area? Keep an eye on the market so that you know whether or not it’s overpriced. Visit Rightmove or Zoopla for information on current house prices. Both sites will also show what the last sale price was for the property you have in mind.
Get the estate agent on your side
Make sure they know your situation – especially if you aren’t part of a big chain – and ensure they understand you have a mortgage offer agreed. Put your offer in writing (pointing out that it is subject to the valuation being consistent with your offer) and show that you mean business but don’t appear too keen. If you are first-time buyer be sure to let the agent know.
Make a realistic offer
If you are going to offer below the asking price then make it a fair offer. Research from Clear Score showed that 22 per cent of vendors would take an offer five per cent below the asking price if the buyer wasn’t part of a property chain.
Be specific if you have to keep negotiating
If your first offer is turned down, make a second offer but be specific – offering £304,550 rather than £305,000 is a good idea as this may indicate that you have a maximum limit on what you can borrow. Some vendors will agree to this rather than risk losing you.
Say why you’re negotiating
If you are negotiating to try and get a lower price rather than offering the asking price, say why you are doing it. Maybe the house you have in mind needs repairs that you will have to pay for when you move in, or perhaps it has an old boiler that could need replacing soon.
Play to your strengths
If you are in a strong position, i.e. you have a mortgage offer confirmed and you aren’t part of a chain, let the vendor know. If the vendor is keen to move quickly and you’re renting for instance, this puts you in a strong position.
Show that you’re serious
Make sure the vendor knows that you are keen to move forward and not just putting in a vague offer while viewing other properties. You can explain your current situation and explain that you’re keen to move quickly. You could even suggest a potential timeline for moving.
Ask about white goods
If you can’t get the house price down, you might be able to save money by asking your vendor to include white goods within the sale price. This can save first-time buyers a lot of money.