It’s a buyer’s market at the moment with properties selling for £16,000 below asking price on average, according to Zoopla.
Thanks to a glut of homes being listed, it has created an opportunity for canny buyers to muscle in, haggle and grab themselves a bargain.
Negotiation isn’t a natural skill for many, no matter how many episodes of Location, Location, Location they’ve watched. But help is at hand.
Phil Spencer, co-presenter of the Channel 4 show and one of Britain’s most popular property experts, alongside two other buying agents, here reveal the secrets of the perfect haggle to bag your dream home at a discount.
Phil Spencer, co-presenter of the Channel 4 show Location, Location, Location, reveals the secrets of the perfect haggle to bag your dream home at a discount
1 Offer at least 10pc below asking price
Many buyers struggle where to start the bidding. If a property has just come on the market, there is less room for negotiation.
However, if it has been on the market for weeks or even months, that’s a sign it’s overpriced and ripe for haggling.
‘Our rule of thumb is anything that’s been on the market for more than four weeks is going to be 10 per cent overpriced,’ says buying agent Nicholas Finn.
2 List reasons for offering lower price
Tell the sellers why you have made the offer you have – they’re much more likely to take it seriously.
‘It’s a good idea to explain how you came up with the figure you’re offering,’ says Spencer, who is also founder of property advice website MoveIQ.
‘If it’s low, it could be because you’ve concluded the home needs doing up, or your research has revealed an issue – or just that the place is overpriced compared to similar homes in the area.’
He also insists it’s important not to become disheartened when knocked back.
‘Unless you’ve offered at or close to the asking price, it’s likely your first offer will be rejected,’ says Spencer. ‘However, that is not necessarily a bad sign – it’s just a stage in the negotiation process. The key thing is to ask the estate agent why the seller rejected your offer. Any information you can get here will help you calibrate whether and how much to increase your offer.
‘Ask if the seller has other offers. If they haven’t, increasing yours would mean you’re effectively bidding against yourself.’
3 Don’t rely on property websites for valuations
Asking prices are confusing. Sellers tend to want to sell their property for the maximum possible while estate agents can be guilty of promising they can get more than the home is worth purely to win the instruction.
Speaking to estate agents in the area, looking at the sold price on Land Registry and checking recently sold listings on property portals gives a sense of what a property might be worth (File image)
Determining what a property is worth is not easy. Online tools such as Zoopla’s instant home valuation might give some idea, but they can’t be relied on.
Speaking to estate agents in the area, looking at the sold price on Land Registry and checking recently sold listings on property portals gives a clearer sense of what a property might be worth.
‘We have an American client who had already agreed to buy a house in the Cotswolds when they approached us,’ says Finn. ‘I asked why they had offered £925,000 on it, given the asking price was £950,000. They said it seemed like a reasonable figure to get off an asking price. We advised them the house was actually worth £875,000, based on comparable evidence.’
4 Put an offer in writing
Making the seller and their estate agent think you’re a serious buyer is important, Spencer says.
‘Even if you make your first offer verbally, follow up by putting it in writing,’ he says.
‘This will avoid any confusion down the line, and it gives you the chance to drive home what makes you an attractive buyer. Remember, the seller’s decision will rest on more than just the number.’
5 Pencil in a survey before an offer is accepted
If you want to show that you’re serious, have a mortgage broker, solicitor and even surveyor lined up at the point of offer.
Buying agent Jonathan Hopper, of Garrington Property Finders, adds: ‘There are two ways to win the negotiating game – and only one involves the price. If you can demonstrate that you are the most serious and best prepared buyer – “proceedable” in estate agent jargon – you will give yourself a huge advantage over rivals.’
He advises showing the estate agent an ‘agreement in principle’ from a mortgage lender confirming they are willing to lend you enough to cover your offer price.
‘Instruct a solicitor to handle the conveyancing of your purchase and include a confirmation email from the lawyer to show they are ready to get started,’ he adds.
‘Likewise, there’s nothing like including in your offer that you’ve got a surveyor ready, and could they come next Tuesday?’
6 Butter-up the seller
Sellers tend to prefer the idea of selling their home to a family or first-time buyer than a developer or buy-to-let landlord.
Finn says that when he bought his home in Ealing, west London, he managed to beat a number of developers offering more money.
‘When my wife and I viewed the property, the sellers were frosty as they thought that we were developers.
‘But when they realised we were looking to make a family home, they warmed up and it quickly became a question of how much we could afford rather than how high we could go.
‘Don’t talk about knocking walls down and doing big extensions during the viewings. Also, don’t insult their decor.’
Playing hard-to-get can work in your favour. If the seller is keen to sell quickly, you have time on your side and can remain interested without changing your offer (File image)
Finn also shared a story of a client who bought their home from an elderly couple who were preparing to downsize.
‘They found out the couple were fretting about having to get rid of so much furniture and having to do all the tip runs,’ says Finn.
‘When they put the offer forward, they told the couple to keep what they wanted and to feel free to leave anything else behind. It was a weight off that seller’s mind.’
7 Don’t be afraid to dawdle
‘Take your time,’ says Spencer. ‘Playing hard-to-get can work in your favour. If the seller is keen to sell quickly, you have time on your side and can remain interested without changing your bid.
‘This is a neat way of negotiating without actually negotiating – it’s about who blinks first.’
8 Plenty more fish in the sea
When an estate agent informs a potential buyer they have other viewings lined up or interest in the property, it can cause panic. Or when people find a property they really want, they can be in danger of getting carried away. Instead, stay calm and don’t rush decisions.
‘Only ever offer more than the asking price if you know someone else has offered the asking price, or if you are desperate to get this particular property,’ says Spencer.
‘There are always other properties, so be ready to walk away if the seller isn’t open to negotiation. It’s never a good idea to spend more on a property than it’s worth.’