August 25, 2019

How to Negotiate When Buying or Selling a House

Moving house is something almost everyone will do in their lifetime, with recent figures suggesting that there were more than 850,000 residential property sales in England and Wales last year. 


It’s also likely to be one of the most significant financial transactions you will ever make, so ensuring you get – or pay – the right price for your property is paramount. Read on to find out how to negotiate when buying or selling a house.

Don’t show your hand too soon


Sometimes that first step through the door is enough to tell you that this is the house of your dreams – but don’t let the estate agent – or even worse the seller – know just how excited you are. 


Showing you have fallen in love with the property and can’t imagine living anywhere else will suggest to them that you will do anything to get your hands on it, even if that means paying a top price. 


Remember that however helpful the estate agent appears to be, they are first and foremost working on behalf of the seller and will be relaying messages on your response back to them – so keep your emotions in check if you want to be in the best position when it comes to negotiating.


Do your research


Before heading out to any viewings, it’s certainly worth spending time looking at how much properties in your desired area are on the market for or have recently sold for – the Land Registry is a good place to start.


This will help you gauge whether the house you are interested in seems to be priced fairly or if you should be offering lower, and by how much – and this data can definitely prove useful during the negotiation process when buying a house. 


Similarly, once you have found the house for you, do plenty of research before you make the offer, including looking around thoroughly during viewings. 


Although you might feel under time-pressure to get your bid in quickly, dedicating a few hours to increase your knowledge of the property can really impact your negotiating tactics and put you in a better position. 


For example, you should be able to see exactly how long the house has been on the market – if it has been around a considerable amount of time and you know the owners have found a new property, then they are likely to be open to a lower offer as they are in more of a rush to sell. 


Additionally, if it has been up for sale for a long time, ask yourself why. Is there a structural issue putting people off or is there some major work that needs doing? Finding out these pieces of background information will stand you in good stead when it comes to bargaining.


Add in some extras 


Selling a house also requires strong negotiation skills and there are a number of things you can do to try and keep the price at the level you are hoping for. 


First time buyers, for example, might be willing to pay a higher asking price if white-goods are included, while others may be keen on keeping some of the furniture, such as curtains or wardrobes, especially if they are bespoke to fit particular rooms.


Other issues – such as offering to take the house off the market if they up their bid to a certain point – can also be a good bargaining tool when it comes to selling a house, as many buyers worst nightmare is getting gazumped on their dream property. 


And finally, if a bid comes in lower because the prospective buyer says they need to keep some cash to get repairs done, offer to take that burden away if they will increase their bid. In all likelihood they too are using this as a tactic and there’s a good chance you can get the work sorted at a lower cost before you leave the property. 


Show what you have that sets you apart


If you’re looking to buy a property in a popular location, chances are you won’t be the only bidders. But negotiation doesn’t have to be all about money. Speed is a major factor in many property transactions, so if you are in a position to move fast, shout about it! 


Many buyers – especially those who have already found their next home – are desperate to move, and may accept a lower offer if it means they can complete their own purchase on time. 


This obviously puts first time buyers in a great position – but that’s not the only option.  


One of the best ways to negotiate when it comes to buying a house is being chain-free, not having one to sell at all. If you’re in a chain and keep being side-lined by someone who isn’t, it could be worth thinking about selling your own home first before you continue your own property search. 


This means that when you do find the perfect home, you may well be in the best position and be able to get it for a lower price than expected. 


Have your finances sorted


It’s certainly worth assessing your finances and knowing what you can afford before you start viewing properties. 


Getting a mortgage in principle not only gives you an idea of the types of properties available to you but also means you will be taken more seriously by both estate agents and sellers, putting you in a better negotiating position than others who have not yet taken that step. 


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The numbers


The big question most people ask themselves is how much should I offer – or alternatively – how much should I accept? 


Getting the balance right between wanting your offer to be taken seriously but still getting value for money is always tricky. Some say that offering five to ten per cent below the asking price is the best way to start, but in reality, there is no right or wrong figure.


Unless there are exceptional circumstances, your initial offer should generally be lower than you can actually afford to pay. This means that when the seller comes back to say no, you are in a position to increase your bid until you can meet in the middle at a number both parties are happy with. 


There are, however, always other things to take into consideration. For example, if you know the seller has been offered the asking price already, are you willing to go above it? It’s worth thinking about this and having your very top figure in mind before you even go through the door.


If you’re a seller, your logic should be pretty similar. No matter how keen you are to sell, don’t be tempted if the first offer that comes through your door is lower than you want it to be. 


Remember that buyers expect to enter into a negotiation process and so will be offering less than they can afford – going back to them with a counter-offer is very unlikely to immediately drive them away. Keeping nerve and having a firm idea of the lowest figure you are willing to accept is just as important for buyers. 


Sealed bids


If you live in an area where demand for houses outstrips supply, there is a strong possibility you are going to have a lot of interest in your property. 


One negotiating option when selling a house in this scenario is a sealed bidding process, which continues to remain popular in some areas of the country. 


It often results in higher first-time bids and can take away some of the complications when there are multiple parties interested. 


If you are interested in a house in which sealed bidding is the only option, don’t panic! 


Firstly, stick to your budget and what you can afford, even if you are tempted to go higher. 


It’s also a good idea to avoid round numbers so as not to offer exactly the same as someone else, for example bidding £550,050 instead of £500,000 could just make the difference.


How to negotiate when buying or selling a house


Moving house can be a complicated – and at times frustrating – process, but thinking carefully about how you can negotiate when it comes to both buying and selling can stand you in good stead. 


Doing your research, showing what you have to offer and most of all, sticking to your principles and your budget, means it shouldn’t be long before your dream move becomes a reality. 


If you’re looking for an East London Estate Agent who can help you negotiate and get the best price, get in touch now with Keatons.

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