As a homebuyer, you will more than likely fall in love with one (or more!) of the homes that you view. However, all properties – even your ‘dream’ home – have a top value so try not to get too carried away. No matter how much you think ‘it was meant to be’ you should try not to exceed the house’s market value with your offer otherwise you leave yourself open to losing out in the long term, particularly if you do decide to resell in future.
Do your homework
Find out how long the property has been on the market, and how much similar houses nearby have sold for in recent months. If properties are hard to find or are selling quickly, it could well suggest that the area is highly sought after or, equally, that the area is so desirable that people rarely move from there! If this is the case it can often mean that the vendor will have the upper hand in the negotiations, so you will need to decide on your absolute maximum budget and be prepared to pay it. Gazumping, where a seller accepts a higher offer after agreeing to yours, is frowned upon, but sadly it does still happen – and who can blame an owner for wanting to get the maximum they can for their property? If this does occur, don’t get involved in a bidding war, as things can soon get out of hand. Set a maximum budget before you start, ask the agent what evidence supports the asking price and get the status of your offer confirmed. Don’t raise your offer just because you feel under pressure.
You should also find out whether the vendor is in a hurry to sell, for example if they have put an offer in on another property themselves and are dependent on their property selling to proceed. If so, this could put you in a powerful bargaining position if you can proceed immediately.
Your buying status
Your perceived desirability as a buyer can also have a big impact on your offer; for example, a cash buyer, or a first-time buyer with a mortgage already arranged, is more likely to get a better deal than someone in a chain. Letting the seller know that you are a serious, well organised buyer with a solicitor in place will always make your offer more attractive.
Making the offer
Having carefully weighed up all the associated costs, together with the asking price, you should be able to reach an amount that you are willing to pay. Remember to take into account any work that needs to be done to the property but only factor in the essentials, such as electrics, plumbing, a new roof or windows when it comes to your negotiations. The owner is not going to drop their price for cosmetic touches!
Next, follow these steps:
- Start with a low, but not unrealistic, offer – you can always increase, but you can’t come down later (unless your survey throws up any surprises).
- Mention nearby properties, of a similar standard, that you have viewed and which are available at a lower asking price.
- Tell the seller if your finances are already in place and you can move quickly.
- Explain that your offer is not something you have plucked out of thin air but is based on current property trends in that particular area.
- Let them know that you are a reliable, serious buyer.
If an agent tells you there is strong interest in a property you like, it’s fine to ask how many viewings and offers there have been. Only offer when you’re ready, don’t feel pressured to move too quickly. For a Yopa property, you can make and track your offer in YopaHub or contact the agent named on the listing.
Should you haggle?
The answer to this is almost certainly ‘yes’. There are good and bad ways to haggle, though. One often leads to a good discount, while the second potentially puts off an owner who loves their home. Explain the reasons for your lower offer in a polite way; don’t criticise, and only mention essential works. An owner will know if their kitchen is outdated, so tell them, for example, that as much as you love the space, the layout doesn’t work for you. Other good ways to haggle are:
- Submit your offer through your agent – let them earn their money.
- Be clear that your offer is subject to survey, as hidden faults could well mean that you want to revise your initial offer.
- Your offer will, of course, be subject to contract. This means that if anything unexpected crops up during the local searches, such as a public right of way through your garden for instance, you can withdraw.
- Make it clear that if your offer is accepted you expect the property to be immediately taken off the market, as this avoids gazumping.
- Tell your agent you want written confirmation accepting your offer from the vendor’s agent to make it official.
When you are considering making a lower than asking price offer you should also check how long the house has been on the market, whether there have been a lot of viewings, and if there has been an offer made previously. If so, find out how much the offer was and why was it refused. It’s possible that a previous sale fell through due to finances or the breakdown of a chain. If you’re in a position to proceed, this might make you an attractive proposition. Of course, the vendor’s agent may prefer not to disclose some of this information, but property portals such as Rightmove and Zoopla include ‘date added’ information on all of their listings. If a property has been reduced recently then it is likely to have been listed for some time without significant interest.
Securing your dream home at the right price
It’s easy to get carried away in the heat of the moment, and this is exactly why it is so important that you stay in control.
Never be afraid of asking questions about a property. For example, ask when the boiler was last serviced and make sure that all the radiators work. Ask the owners, or the agent, when the double glazing was installed; the very old types are nowhere near as energy efficient as newer double-glazing. Check the guttering for any breaks, and if there’s a flat roof ask when it was last resurfaced.
Most importantly, go back for at least a second (or third!) viewing at different times of day. After all, this is likely to be the biggest purchase you’ll ever make, so you want to make sure you’re buying something you really love, for the right price!
