It’s a mistake to think that you have to pay the estate agent’s advertised price when you’re looking at homes to buy.
The simple fact is that in recent years, at least 75% of homes bought are eventually sold for less than the original asking price, according to the National Association of Estate Agents (NAEA).
Now you’ll carefully research to get the best value conveyancing solicitor’s quote and to get the best mortgage deal (if you’re not buying with cash) and you’ll look to save money where possible on factors related to your conveyancing process, such as shopping around for cheaper survey quotes, so why wouldn’t you negotiate with the seller on the largest ticket item, the price of the property itself?
1. Carefully research property values in the area you’re buying in
You can obtain lots of information about your property’s price by using Rightmove or Zoopla. Both online websites offer ‘House Price’ search tools to help you research the sale prices of properties in your local area (you can even see what you seller paid for their property when they originally bought).
When reviewing you should search for:
- Completed sales – this is a truer reflection of the current market value of a property in your local area as it only shows properties that have completed. Be careful though that anything older than 6 months may not reflect the value of your property in the current market due to market increases and decreases.
- For sale – this isn’t a true reflection of the current market value as the property hasn’t sold at that price yet.
Your search needs to be restricted to the area you are buying; specifically on the same street. Price fluctuations can vary considerably from one end of a street to another as there may be greater value to being closer to schools or commuter routes.
2. Take care to notice any issues and defects related to the property
After your first viewing you may have noticed possible property defects which could help you with negotiating the property price. Some things to look out for include:
- Did the hot water come on in the bathroom?
- Was the water pressure powerful enough for you?
- Could you see signs of damp or mould around windows or in the bathroom (possible signs of rising damp)?
- Is there a mouldy smell in the property?
- Are there any cracks inside or out (possible signs of subsidence)?
These are indications that the property isn’t in an optimum current market condition and you’d be strongly advised to instruct an experienced RICS Building Surveyor to check for further defects.
The Royal Institution of Chartered Surveyors (RICS) states that “on average home buyers spend £5,750 on repairs once moved into their new home”.
It is for this reason most offers to buy a property are made ‘subject to survey’.
The report which your RICS surveyor produces, resulting from their inspection, might be key to providing watertight reasons why the seller should lower their price or at least contribute towards the remedy of any property defects.
And finally, your survey might even prompt you to pull out of a purchase entirely if it’s clear that you’ll end up losing too much money on repairs or have to put up with months or years of drawn-out remedial work after you’ve moved in.
3. Is your vendor themselves buying a property?
If your vendor is buying another property in turn then you are in a far stronger position regarding negotiating through your estate agent. The same reason you don’t want to lose this property is the same reason your seller doesn’t want to lose theirs which means they will be likely to negotiate as long as you negotiate based on solid reasons.
You are strongly advised to speak to your seller during your viewing about these kinds of matters or, if they’re incommunicative, to speak to the estate agent involved.
How do you negotiate with the estate agent
Once you’ve established a reason or reasons to negotiate, you need to put forward your new – and reduced price – offer to the estate agent along with any supporting evidence you may have.
You might email the estate agent and include ideas such as the following, for example:
“We particularly like the property and can see our family settling for a long time in the area. We would like to make an offer, however we’ve some concerns about the property’s valuation. We note that Flat 7, Exemplum Street, sold through another estate agent for £X. Their property is of a similar size to this one and it completed only a few weeks ago. Therefore we’d like to make an offer of £X. We’ve received our mortgage in principle and are keen to complete as soon as possible. We hope you find this offer agreeable and look forward to progressing as quickly as possible.”
The actual reasons you use will naturally vary from the above, but whatever they are, you should present them in a balanced and thoughtful way which allows the seller to know you are serious about buying and aren’t simply looking for a discount.
And always believe in your ability to negotiate fairly – in life in general – once you’ve established robust reasons to do so.