After years of saving and months of searching for your dream home it can feel daunting to have to negotiate with your estate agent when putting in your offer. This is worsened when buying a home in London as your offer could be up against 10 other buyers.
The good news for buyers is that in June 2017, the National Association of Estate Agents (NAEA) reported that “the number of homes which sold for less than asking price rose to 79 per cent last month – up two per cent from May 2017”. The question is how do you successfully negotiate with your estate agent whilst your heart is set on buying the property no matter what?
Here are 4 things that you can do to make sure you buy the property at the best price possible.
1. Do your own homework on the price
Before starting any negotiation you should first research your property’s price against other properties of similar size, in a good condition within a close proximity to the property you are buying. Prior to online search engines this would have been more difficult, however nowadays Rightmove and Zoopla offer market information linked to all their property listings. You can 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 has not sold at that price yet.
You should focus your search in the area you are buying and ideally on the same street. Price fluctuations are considerable from one end of a street to another as buyers pay more to be closer to schools or commuter routes.
With the knowledge of what properties have sold for in your local area you now need to work out if the property you are buying is in the condition that commands the full market price.
2. What is the condition of the property?
During your viewing you need to keep a keen eye out for things that don’t look to be in good working order or appear run down. Things to look for are:
- How quickly does it take for the hot water to come through in the bathroom?
- What is the water pressure like when you turn on the shower?
- Are there any 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 all potential signs that the property isn’t in the best current market condition and you’d be strongly advised to instruct a RICS Building Surveyor to check over your property for any defects.
If there are defects with the property then you shouldn’t pay full market price for the property as these have an effect on the property’s value. When you make an offer you should confirm that it is based on the current condition of the property and provide any evidence you have to support this.
3. What is the position of the seller?
Knowing the position of the seller helps you during your negotiations with the estate agent. As much as your heart maybe stuck on their property, theirs may also be stuck on someone else’s property. A seller isn’t going to want to lose their onward purchase because you pull out from buying their home based on price – as long as you negotiate based on the above.
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.
4. Never overstretch yourself financially to buy a property
You should never overstretch yourself to buy a property even if it is by a small amount. The costs of living in a property can come as a shock to a first time buyer, especially when the boiler breaks down for the first time or the washing machine leaks. By maintaining a strict budget and negotiating to this with your estate agent, you can ensure that you have some spare money in the bank for when you need it.
Now you know how to spot an overpriced property, or if the property isn’t in a good condition and even the position of the seller, you can use this to negotiate with the estate agent. Make sure not to make an offer too low for a property as this may exclude you from making further higher offers if another buyer is offering more reasonable prices. However always remember to have a limit of what you can afford and never go over it.
We hope this helps you negotiate with your estate agent.
Co-founder of SAM Conveyancing