Many buyers feel that the asking price advertised by the estate agent is what the property is actually worth. Most buyers don’t know that they can and should negotiate with the estate agent, however you need to negotiate using some of the tips below.
What you should never do when buying a home is to negotiate without any reason at all as this will often alienate you from the seller. You should always provide a reason for the lower offer to help the seller understand the reason for your offer.
Here are 3 tips to help support negotiating a lower sale price with your seller.
1. Research the property’s value
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. Did you spot any issues?
After you first viewing you may have noticed a number of defects of issues that could help you with negotiating the property price. Keep an eye out for:
- 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?
- Is there a mouldy smell in the property?
- Are there any cracks inside or out?
These are indications that the property isn’t in an optimum current market condition and you’d be strongly advised to instruct a 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’.
3. Is your seller buying?
If your seller is also buying then you are in a stronger position to negotiate 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 a reason.
The best advice is to speak to the seller during your viewing, or speak to the estate agent to find out the position of the seller.
How do you negotiate with the estate agent
Now you have a reason to negotiate, you need to put forward your offer with any supporting evidence you may have.
For example, “We love the property and can see ourselves living in the area. We would like to make an offer, however we have some concerns over the property’s valuation. We note that Flat 3, Example Road sold through another estate agent for £X. Their property is of a similar size to ours and the completion only took place last month. On this basis we would like to make an offer for £X. We have our mortgage in principle and are keen to complete as soon as possible. We hope this agreeable and look forward to completing as quickly as possible.”
This is only an example but it demonstrates a more balanced and thoughtful approach to negotiating that allows the seller to know you are serious at buying and aren’t simply looking for a discount.
I hope this helps you negotiate with your estate agent.
Andrew Boast MAAT MIC
Co-founder of SAM Conveyancing