If you are looking to purchase a property then getting your dream home at the best possible price will be your main goal. However, negotiating the best price is not as easy as it may appear. But if you follow my top tips below you will almost certainly have a greater chance of knocking down the asking price.
1. Understand that the advertised price is not a valuation
When sellers first talk to an estate agent they tend to ask them to 'come round and give me a valuation'. However, valuing a property is the work of a surveyor so all an estate agent can do is set a marketing price not a valuation, this price will be set through a discussion between the estate agent and the seller. You need to be aware, however, that some estate agents will inflate this price just to get the instruction to sell the property. If then the property doesn't sell straight away the estate agent will try to get the seller to reduce the price down to a more realistic level. Unfortunately many sellers still see this price as a true valuation and therefore can be reluctant to lower this price to secure a sale. Understanding that the price advertised is potentially negotiable is the first step in the negotiating battle.
2. Do your research
Researching the property market is really easy these days with the advent of property portals such as Rightmove, Zoopla and PrimeLocation. These portals give access to most properties that are on the market, as well as some useful tools. Read my article The smart way to house hunt online to find out the best tools available. It is vital, therefore, that you research the property market in the area you are looking to get a good idea of what is available and what you can get for your money. Armed with this information you can compare the price of houses you are interested in with the rest of the market and start to think of what price you would be prepared to pay for your dream home.
3. Make sure you do plenty of viewings
You cannot get a true feel for the property market unless you do plenty of viewings. It's the difference between watching a football match on TV and seeing one live. Getting inside properties will give you a true understanding of what is available and what you can realistically expect for your money. I would also suggest that you make a note of all the properties you view and a brief list of the pluses and minuses for future reference.
4. Be cautious with sellers who have not found a property
If a seller has not found a property then you need to ascertain if they are really serious about selling. Many sellers want to sell their property before looking for one to buy and this could result in potential problems in the future. Firstly, they will probably be reluctant to negotiate on the price as there are not under pressure to move. Secondly, if you do go ahead with the purchase then there is greater chance that the sale will fall through due to the seller being unable to find a house they want to buy. Ask the estate agent if the sellers have found a property or are actively viewing as they will have this information to hand.
5. If you make an offer below the asking price make sure you have a good reason
When you make an offer below the asking make sure you have some good reasons for doing so, such as:
Condition of property - you feel there is some work to do bringing the property up to your standard, back this up with an estimate of the potential cost involved
Property comparisons - if can find similar properties at a lower price then this can back up your offer
Your position - if you have sold your current property, or no property to sell, and have your mortgage agreed in principle then you should use this as a bargaining position to back up your offer
6. Be prepared to walk away
It's not easy, but to secure a good deal on a property you need to be prepared to walk away. If you have decided on a price you are prepared to pay for a specific property then stick within it, unless of course you have fallen in love with the property and your heart is ruling your head. Even if you do walk away all is not necessary lost. If the property is still not sold after a few more weeks you can go back to the estate agent to see if your original offer would be reconsidered.
Looking for a financial adviser near you?
Do you need financial advice? An independent financial adviser can show you how to make the most
of your money. Find your nearest qualified and regulated adviser using this VouchedFor search tool.
Alternatively, Hargreaves Lansdown, one of the UK’s largest firms providing restricted financial advice, is offering a £200 John Lewis voucher* to new clients.