When you have found the home you are contented with, you are almost ready to make an offer.
Follow the tips listed below to guide you through each stages of negotiating process.
Before making an offer, there are a few things you should check:
- Make sure that the house is worth the amount you are willing to pay. Have a look at Land Registry accounts for properties that have sold in the same area and compare between the previous asking prices with the actual sale price of the property you want to purchase.When evaluating between houses, just remember that its value can be improved by aspects such as loft conversions, house extensions, fitted kitchens, being a brand new house and being in a good location. On the contrary, the property value can also decrease because of factors such as, being in a bad location and extensions that occupied the whole garden.
- Agree what fittings and fixtures will be incorporated
- Check if the property is leasehold or freehold
- You can also check whether there are any plans for new improvements nearby (new houses, roads, etc), though these should really be checked by your solicitor during conveyancing.
What Amount Should I Offer?
Keep in mind that properties do not have any permanent price tag, which is why it is important to get an appropriate initial offer as this will play a huge part in determining the price that you will eventually pay. Usually, the introductory price is about 5% to 10% lower than the asking price, and the two parties will then make it as a starting point for additional offers and bargains in asking price until an arrangement is reached. Be conscious of the fact that the asking price is frequently set high in order to boost a higher initial offer.
- How many people are attracted in the same property. If you are the sole potential buyer, then you are in a strong negotiating point and the seller is likely to settle a lower price. If there are two or more parties competing for the same property, the seller and their agent will be rougher during negotiations
- How quick does the seller need to sell. If they are in a rush to sell it quickly, they will be more likely to agree into a lower price.
- Is the seller having trouble in selling the house. They are more likely to settle a lower price if this is the case. Check if the asking price has plummeted since it went on the market.
- Can you guarantee the seller that you have enough money to purchase the property? It is ideal to get a written agreement in principle from a mortgage lender to ensure the seller that you will have enough money to pay them.
Negotiation is a skill worth having. Here are a few ways you can grow into becoming a better negotiator:
- Keep cool and don’t look desperately interested. If the seller notices how much interested you are with the property, they know that you’re willing to pay more than what’s it worth.
- Make sure you know what you are speaking about and demonstrate it well. Let them know that you have already viewed plenty of homes, and that you understand how the property market works.
- Stay polite, however angry or stressed you may feel. Aggression will not get you anywhere. Remember that they will likely go for the buyer with whom they are on good terms with.
- It is best to negotiate in person. This way you can better assess the other person’s responses to what you say and reply accordingly.
Negotiating During a Housing Price Crash
Home buyers are in a primary position when there is a property market crash. Sellers are willing to take lower offers and there is a better choice of properties.
- Don’t get overly committed to one property. Badly a specific property puts the upper hand back in the seller. Have plenty of properties in mind and make sure the sellers, as well as their agent know you have other options.
- Do your homework. Learn vital information as much as possible about the property and the sellers. There may be concealed stories about the reasons for the sale that can knowingly improve your chances of purchasing the property at a lower price.
- Time is your friend. Don’t be intimidated into making a harsh decision. In a property market crash, buyers have can play the long game.
- Look for discounts. If the seller still wants more than your bargain, consider asking for other incentives or discounts. These could include paying stamp duty or for new fittings and carpets.
Negotiating In a Booming Housing Price
The power of the home seller rises as the prices in the housing market boost up. It is a time when asking prices are not just achieved, but often surpassed in the best areas. It is most likely the worst time for buyers.
These ideas will assist buyers make the best deals during a house price boom:
- Study the local market. In some areas, properties could easily be bought out but there are also areas where buyers are still having some trouble in selling. Find out the areas where the prices are still in minimum.
- Keep away from bidding wars and sealed envelopes. Estate agents will try any mean possible to make sure their clients gain the full benefit from a house price boom. These could comprise joint viewings to intensify the atmosphere of competition, which can often end up purchasing the property way over the actual asking price.
- Be prepared for disappointment. It is essential not to pin your hopes on only one property.
- Don’t be lured into borrowing more than you can afford. Set a maximum amount you can go to and stick to it no matter what. During a house price boom, a lot of people can be left with too much debt.
Once your proposal has been accepted, it must be formally made in writing, and be subjected to certain terms and conditions. Make sure that the seller and their agents understand the terms of your compromise.
- Your proposal should be “subject to contract and to survey”. This means that you are not lawfully bound to continue until specific surveys have been adequately completed, and signing of vital contracts has already been made. This is very crucial.
- State what fittings and fixtures you want to be included, and what efforts must be made on the property that you want to carry out, before the sale has gone through.
- It is a great idea to demand that the property should be removed from the market as soon as both parties have reached an agreement. Placing a deposit can help show your good intentions.
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