Whether you’re a first-time buyer or simply want to purchase a property at a price you are happy with, you should consider learning the art of negotiating a house price.
This can feel intimidating, especially if you are concerned you could lose that beautiful property if you don’t do it right.
However, by asking the right questions, gathering relevant background information, getting clear on your finances, and carrying out thorough checks, you can be successful and move to your dream house at a price that works for your budget.
In this article, we’d like to share our professional insight and guide you through the process so you can negotiate a UK house price like a pro.
1. Do your research
Up-to-date, accurate information is key if you want to be successful when you’re negotiating a house price. That’s why we always recommend that you understand the local property market, looking at similar properties in the area and their prices before you put in an offer.
In the areas that we cover in Bath, Bradford on Avon, Wiltshire and Somerset, demand continues to outstrip supply so it is often better to play it safe when negotiating the price of your dream home in the area.
Having said that, if the property has been on the market for a while or the homeowners are keen to move soon, you could have an advantage.
2. Get a Mortgage in Principle
Estate Agents and sellers will take you more seriously if you have a Mortgage Agreement in Principle (AIP) before you put in an offer. This will also help you work out what price bracket you can afford and how much you could potentially offer for a property.
Once this is in place, the homeowner is more likely to accept your offer, especially if they are keen to move soon. Tell them that you have an AIP when viewing the property and you will have a bidding advantage.
3. Be cautious
When you view a property you are interested in, try not to appear too keen or appear overenthusiastic, even if it appears to be your dream home.
Otherwise, the Estate Agent or homeowner may believe you’re willing to pay more because you’re in love with the property and be less receptive to offers. Express your interest but be cautious.
4. Ask the right questions
Make sure you ask the right questions when you view the property so you better understand how much room there might be for negotiating the house price. Here are some ideas of what you should ask:
- What is the local area like? Is there good access to public transport, schools, employment, and amenities?
- How close is the property to the neighbours?
- Which direction does the property face? Is it south-facing and will enjoy plenty of natural light or north-facing and quite dark?
- Will any areas need redecorating?
- When was the boiler last serviced?
- Are the windows double-glazed?
- When was the roof last repaired or resurfaced?
- Why has the owner decided to sell?
- Has the owner found a property to move to?
- When was the property first listed and have there been any offers?
All this information can be used as ammunition and justify your offer price.
5. Make an offer
Once you’ve done your research, found a property you love and asked the right questions, you can put in an offer on that property. Remember to factor in extra costs such as Stamp Duty, solicitor costs and surveys, then make your first offer.
As a rule of thumb, if you really like the property a lot you should offer the asking price – or even more if you discover there are other purchasers putting in offers – remember to ask the Estate Agent. Too many people are disappointed because they feel they ought to be offering less, only to find out someone has offered more!
Often people offer 5-10% below the asking price as a matter of course, and you can adjust this if the house has been on the market for a while, there hasn’t been much interest or if the homeowner wants a quick sale. However we wouldn’t recommend this if you really believe you have found your dream home: you’ll be living in it for many years, and the small saving will soon be forgotten or seem unimportant.
Call the Estate Agent to make your offer then follow up in writing, explaining why you’ve offered this amount. It’s also worth explaining why you’d be an ideal buyer and attaching proof of your Mortgage Agreement in Principle (AIP) if you have one.
6. Wait for a response
Next, you will receive a response from the Estate Agent responsible for the sale of the property and find out whether it has been accepted, declined or if you have been outbid.
If they refuse or you’re outbid by another buyer, you need to decide what to do next.
You can make a counteroffer if you can afford more or you can refuse and look for another property. Even if you do refuse, you may find that the house stays on the market and the seller could come back to you and accept.
Has your offer been accepted? Great! It’s time to start the admin. But this isn’t necessarily the end of the house price negotiations.
7. Arrange any searches and surveys
Engage the services of a solicitor or conveyancer to handle the necessary paperwork and conduct searches and get an independent surveyor to inspect the property you want to buy and inspect any potential issues that may not be immediately visible.
If they do find any problems they will also include an estimated cost of how much it will be to fix them. You can lower your offer by this amount if this is the case.
8. Exchange contracts
Once your offer has been accepted, the necessary surveys have been carried out and your finances are in place, you can sign and exchange contracts. You’ll also get the keys for your beautiful new home in and can move in when agreed with the seller. Congratulations!
Summary
When you have your eye on a beautiful home, negotiating a better deal can feel intimidating. If you do it wrong at any stage, the seller could refuse your offer and you could risk losing out.
However, by doing your research, asking the right questions, making a reasonable offer, getting a Mortgage in Principle and carrying out the relevant surveys, you could win the negotiation game and buy your new home at a price that satisfies both parties.
