Negotiation forms a crucial part of buying a house, especially now that house prices are at record highs. In fact, research conducted by estate agent Douglas & Gordon shows that 61% of landlords and sellers find negotiations to be an essential part of the process.
The research also shows that 64% of UK homebuyers and renters feel confident negotiating over property prices, but six in 10 people admit the biggest challenge is timing and knowing when to negotiate. So how do you complete the perfect negotiation when looking to buy a property?
What’s happening in the housing market?
The UK property market is more competitive than ever, fuelled by mortgage price wars, government incentives and an imbalance between supply and demand.
According to Rightmove, though the average asking price for a British home remains high, it dropped by 0.6% in November. A drop was expected as sellers usually lower house prices to lure in potential buyers ahead of the Christmas holidays. This makes the next few months among the best times to buy a house.
Currently, the average asking price for a house is £342,401, up 6.3% from this time last year.
What problems do buyers face when negotiating?
The research by Douglas & Gordon shows that 36% of Brits typically avoid negotiating due to anxiety. It also reveals that seven in 10 Brits admit that their largest concern when negotiating is losing the property or being outbid by another buyer.
This shows that buyers consider themselves to have low negotiating power, and feel that the best chance of success is to offer the asking price to be taken seriously.
How should you negotiate when buying a property?
With 60% of people finding negotiating the most significant struggle when trying to buy a property, Douglas & Gordon provide expert advice on how to complete the perfect negotiation confidently. Here are the three steps they recommend.
1. Seek help from a trusted estate agent
Seeking the help of a trusted estate agent is recommended. They are constantly watching the market and can provide professional advice on market conditions, helping you act quickly and make a reasonable offer.
They can tell you how realistic a seller’s price is and what other properties in the area have sold for. Just because a seller has set a certain price doesn’t mean the property is necessarily worth that much. Such information can give you a better picture of what a good offer would be, which is essential when negotiating.
2. Research the property’s locality
Douglas & Gordon’s research reveals that around 11% of Brits don’t research the area they’re house hunting in before putting in an offer. Researching the area helps you determine a reasonable offer, which can even be below the asking price.
3. Show the seller that you’re serious
Bidding at a lower price but backing it up by showing that you’re a serious and prepared buyer can jump you to the top of the queue. If you can move quickly, show proof of funds and fit in with the seller’s timescales, you’ll be an attractive buyer.
While being quick off the mark is important, it’s still best to proceed carefully, remembering to carry out your due diligence and considering all the costs needed upfront.
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About the author
Victor is a freelance writer who loves to read and write about personal finance and related disciplines with the aim of educating people to make better financial and investment decisions.
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