Negotiate The Best Price When Buying Property
No matter what we buy, we all want to find the best price, but this is clearly the case when buying property. Buying a home is the most expensive purchase you will ever make in your life, not to mention the most important, so it is essential that you find the best value for money deal. Given that there are two (at least) parties involved in a property deal, the buyer and seller, there is an opportunity to negotiate and arrange for a better deal.
The seller is also likely to want to negotiate and obtain the best deal for themselves, but there are ways in which you can strengthen your negotiations.
Research the market
One of the strongest tools you have at your disposal when it comes to negotiating the best price when buying property is knowledge. You need to make an informed offer, and this means you need to review the market and ensure that you are offering a suitable bid for the property.
- If you bid below the expected value, your offer will be dismissed quickly
- If you bid more than the expected value, your offer may be accepted quickly but you will pay over the odds
- If you bid at the expected level, you will remain the running, but the seller may not be in any great rush to sell to you
The more you know about the market, the better placed you will be to make an attractive offer, and this can stand you out from other interested parties.
Know what the average is – not just price but condition
When it comes to researching the market, don’t just find out average property prices and values and stop there. You need to know what the average type of property is like in a local area. Once you know what the average property is like and why the average price has been comprised, you can make an informed judgement on how the property you are interested in compares to the average property.
Ensure that you are in a stable financial place
Before you make an offer for a home, make sure that you are in a position to do so. Some interested parties will make an offer more out of hope than expectation. Therefore, arrange for pre-approval on a mortgage and make sure that your finances are robust enough to allow you to make the best possible offer.
When you are confident that your finances are stable, you enter negotiations with greater confidence. A position of confidence will appeal to property owners, which can only be of benefit if you are looking to negotiate the best price.
Make sure that you are ready to move
If you can show that you are ready to move quickly, you will strengthen your negotiating position. Many prospective buyers have caveats attached to their offer or there may be potential delays attached to the deal. If you have sold your home, you don’t own a home, or you are in a position where you can move home without too much notice, a seller is more likely to take your bid seriously.
Appoint a solicitor
Being able to move quickly is a very appealing trait to have when buying property. You can show that you are serious about the deal and that you are keen to process the offer by having professional assistance lined up. When you appoint a solicitor, you indicate you are ready to progress the deal and for a vendor looking to sell, this is a highly attractive feature that will stand you out from other interested parties.
Are there aspects of your offer that you can use to leverage a better deal?
It may be that aspects other than the price you bid for a property is the strongest aspect you can bring to the negotiating table. Many vendors are concerned about deals collapsing due to a break in the property chain, so if you are not part of a chain, this could be appealing to the vendor.
If all other things are equal, a bid from an interested buyer that carries a much smaller likelihood of the deal collapsing will be much more attractive than an offer from an interested buyer who is part of a length chain.
Find out about what the seller is looking to do next
Sometimes the most important aspect of your negotiating position doesn’t come from your strengths but from your opponents’ weaknesses. When buying a home, try to find out about the seller, their motives for selling the home and what outcome they want to achieve when selling the home.
The seller may have to sell quickly, or they could be under pressure to obtain a certain level of income for the sale. If there are issues which impact on a sellers’ flexibility, you can utilise these matters to negotiate to an outcome that is better for you. If a seller must sell quickly, you can offer a lower price if you are able to conclude the deal at short notice. If a seller is looking to move abroad or is downsizing and has furniture, fixtures and fittings that you want, you can negotiate for these aspects to be concluded as part of the deal, knowing that the seller is unlikely to retain these items or need much persuading to sell them.
Similarly, if you can make a cash offer as opposed to arranging a mortgage, make sure the vendor is aware of this aspect of your offer. It is not uncommon for property owners to accept a lower cash offer, rather than a higher mortgage offer, due to the benefits and certainty associated with this deal.
Don’t forget that the trend in the present day is for homes to sell at less than the initial asking price. Figures provided by NAEA Propertymark have highlighted the growing gap between asking prices and sales prices. In their end of year review for 2017, 77% of homes were listed as being sold for less than the asking price and by March of 2018, this figure had risen to 86%.
The UK property market is currently a buyers’ market, even allowing for the elevated level of demand compared to supply of property. If you are looking to buy property, you hold a strong starting point. Make sure you are aware of all the factors you can negotiate with to ensure you receive the best possible price when buying property.