House Price Negotiation: Your Guide
In a recent First4Lawyers poll, we asked if homeowners regretted not negotiating harder over their home’s price. A total of 47.1% said yes, suggesting that there are a huge number of people out there who wish they’d haggled harder.
When you’re buying a house, there are certain risks involved in the price negotiation stage. Offering too much can mean you pay more than you needed to, but going in too low can mean your offer isn’t taken seriously, which could lose you the home you want.
2021 has already seen record high average house prices, so it’s become even more difficult to find a bargain. This makes it more important than ever to haggle on price and get the best deal you can.
Although certain industry experts have blamed the increase on the chancellor’s Stamp Duty holiday – which begins to taper off from the end of June 2021 – others have pointed to other things. These include a shortage of supply, low interest rates and continued demand from buyers.
This means we’re likely to see higher asking prices for the foreseeable future. But just because someone asks for a certain number, doesn’t mean you have to pay it.
Here are our tips to negotiating on house price.
Do your research
Find out how much similar properties in the area have sold for recently. If they’re significantly under the asking price for the one you’re looking at, bring this up during the negotiation stage. Use it to your advantage.
But don’t stop there. Look on the various property portals to see if the house is being marketed by different estate agents. If it is, the agent you approach might be more likely to convince the seller to accept the offer to secure the commission over the other agents.
Hold things back
Even if you love a property, the best thing to do is keep your emotions in check. Don’t show the estate agent just how you’ve fallen for it or they could convince the seller that you’d be willing to pay more for it. You can point out flaws in the home and tell the agent any offer would reflect them.
You should also keep your top budget from the agent. If they think you can afford more, they’ll probably push harder during negotiations. Letting them think you can only go up to a certain level could help you keep the price down.
Get into position
You need to be ready to go ahead with a purchase before an estate agent or seller will take you seriously. This means you need to have your mortgage agreement in principle sorted so you can show that you’re a serious buyer.
It’s also helpful to show that you’ve agreed a sale on your house or that you’re chain-free. These are the buyers who can move quickest, so will be most appealing to any seller weighing up different offers.
Renegotiate if necessary
You’re allowed to go back to the negotiating table at any point up until you exchange contracts. This means that if the market suddenly changes and properties lose value, you are allowed to change your offer to a lower one. You can also change your offer if a survey reveals issues.
But remember that the seller can do the same and if the market takes an upward turn, you could be on the receiving end of a demand for more money. So try to build a positive relationship with the agent and seller to reduce the chances of this happening.
Choose your conveyancers
Deciding on which conveyancing team you’d like to drive your home purchase forward is something you should do as early in the process as possible. It helps ensure that things go smoothly, allowing you to focus on the more important aspects of a famously stressful time.
To find out how First4Lawyers could help you, just give us a call or try our simple conveyancing calculator to get a quick quote for the legal work you need.
