As with most people looking to purchase a home, you will almost certainly fall in love with one (or more!) of the homes that you view, but try not to get too carried away; all properties have a top value, and no matter how much you think ‘it was meant to be’ you should try to not exceed it.
Do your homework
Find out how long the property has been on the market, and how much similar houses nearby have sold for. If these are hard to find, it could well suggest that properties in that area are highly sought after or, equally, that the area so desirable that people rarely move from there! If this is the case it can often mean that the seller 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 is frowned upon, but sadly it does still happen – and who can blame an owner for wanting to get the maximum they can? If this does occur, don’t get involved, as things can soon get out of hand.
Another thing you may want to do is to find out whether the seller is in a hurry. If so, it 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 one with a mortgage arranged, is much 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 all works that need to be done, but remember that the owner will not be interested in any renovation work you may have lined up. Only factor in the essentials, such as electrics, plumbing or new windows, then follow these steps:
- Start with a low, but not unrealistic offer – you can always increase, but you can’t come down later.
- 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 the air, but is based on current property trends in that particular area.
- Let them know that you are a reliable, serious buyer.
Sometimes when an agent knows that you are interest, they are more than likely to tell you that they’ve had a lot of interest in the house. This is to try to get you to make an offer, perhaps before you are ready, so don’t fall for it. Tell them that there are a couple of other houses you are interested in and it’s going to come down to price as to which one you decide on.
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 house. 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 a discount on the purchase price.
- Your offer will, of course, be subject to contract. This means that if anything unexpected crops up, such as a public right of way through your garden, 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 a letter confirming your offer to make it official.
Another key factor when considering making an offer lower than the asking price is to check with the agent as to how long the house has been on the market, whether they have had a lot of viewings, and if there has been an offer made previously. If so, how much was it and why was it refused? It’s possible that a previous sale fell through due to finances or the breaking down of a chain. If you’re in a position to proceed, this might make you an attractive proposition.
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, or questioning certain aspects of 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 the newer ones. 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 the day and evening. After all, this is likely the biggest purchase you’ll ever make, so you want to make sure you’re buying something you really love.
