Tips on how to negotiate price - Buyer

pardal51

Hi all,
I am currently considering buying a home (FTB), as prices seem not to come down (West - Greater London); savings being eroded by inflation and low return rates on savings.

Being FTB I want/need to understand how to strategically put offers, i.e., how low to start off and how to negotiate throughout. It seems insane the asking prices sellers are setting at the moment.

I would appreciate if you guys could comment.

Example of houses I have seen:

House A:
2 bed terraced, FH, nothing to do, just move in
- Asking price: Reduced from £242,950 to £239,950K
- House bought in March 2007 for £219,950
- Premium of £20,000 or 9.09%

House B:
2 bed Semi, FH, old boiler, would paint, strip wallpaper, but could move in
- Asking price: £245,000
- House bought in October 2006 for £194,950
- Premium of £50,050 or 25.67%

House C (didn’t do viewing, just have rightmove details)
2 bed terrace, FH,
- Asking price £228,000
- House bought in June 2006 for £190,500
- Premium of £37,500 or 19.68%

House (didn’t do viewing, just have rightmove details)
2 bed end of terrace, FH
- Asking price £229,950
- House bought in October 2006 for £199,000
- Premium of £30,950 or 15.55%

Gwhiz

Offer what you think a property is worth to you and you can't go far wrong.

Check out sold prices in the area (not asking prices) to gauge whether you are in the right ball park first.

Don't get emotional, it's a business transaction. That will keep you sane!

brit1234

2006-2007 prices should be your very max price. Your offer should be lower than that. However you may have to wait a few months for the sellers to realise prices are falling again.

What part of West London?

nollag2006

brit1234 wrote: »

2006-2007 prices should be your very max price. Your offer should be lower than that. However you may have to wait a few months for the sellers to realise prices are falling again.

What part of West London?

House prices are up well over 10% in most parts of London from the late 2007 levels, so you need to factor that in.

Indeed, in large parts of west London such as Brentford where brit is looking at - house prices are up over 20% over the past year.

I wouldn't pay much attention to his advice. He missed the bottom of the market in 2009 - predicting that house prices would be down 50% by Christmas.

Didn't quite work out brit, eh?

Why don't you post so much on the Debate House prices threads any more? Is it because you get ripped to pieces?

pardal51

brit1234 wrote: »

2006-2007 prices should be your very max price. Your offer should be lower than that. However you may have to wait a few months for the sellers to realise prices are falling again.

What part of West London?

That's the problem. Sellers don't realise that and they still want to make a profit. We are looking for in Staines and believe it or not Feltham.

nollag2006

pardal51 wrote: »

That's the problem. Sellers don't realise that and they still want to make a profit.

Some evidence would be nice. Plenty of people on here have been holding out for a crash for the past 18 months, only to watch the market fly away from them.

I tapped in Staines into the BBC house price tracker, and here is the truth on house price inflation in Spelthorne up to Q1 2010:

Spelthorne

Average house price
£279,416
House typeAverage priceDetached£420,150Semi-detached£283,468Terrace£233,114Flat£182,798
Annual change in house price
+19.1%
Quarterly change
+6.0%

Total number of sales: 255


Anyway, to give you some constructive advice on what to offer why not take a look at chickmug's excellent post:
http://forums.moneysavingexpert.com/showthread.html?t=1907059

pardal51

StiflersMom wrote: »

Round my way, Isleworth, house prices are flying up. You should take a look there if you want to live in West London - the town is nice, but prices aren't crazy because its so close to Hounslow town.

My neighbour put here flat on the market a few weeks ago, and it went for full asking within 3 days.

I bought an identical one last Spring, and the achieved price is up almost 20% on that.

Are you saying the flat you bought has increased by 20% in 12 months? Which part of Isleworth?

$$$_12

Returning the OP's question. I'd suggest properly reading up on negotiation. This is probably the most expensive thing you ever buy (except perhaps your next house) so £20 or £30 spent on some decent books could save you thousands.

I'd highly recommend anything by Roger Dawson eg:

http://www.amazon.com/Secrets-Power-Negotiating-Roger-Dawson/dp/1564144984

particularly his audio CD of the above if you can get it.

Always always remember that the estate agent is not on your side. They work for the vendor - not you. Similarly you'll get little help from anyone else involved in the process either so you are pretty much on your own.

Always find out why the vendor wants to sell - are they looking for a quick sale or the right price? What extras can they throw in? What is the money going to be spent on? Knowledge is key.

Personally I've had success with these gambits:

• Making low offers but suggesting flexibility
• Ignoring estate agent suggestions of suitable offers
• Only incrementing offers by small amounts (never split the difference evenly)
• Making a big issue out of small things to get extra concessions (and having a long list of them)
• Asking for something in return if I have to make any concession
• Wincing at any price offered by the vendor
• Acting dumb
• Acting forgetful
• Making them wait - going quiet for a few days
• Blaming other people (like wife, dad, uncle, brother-in-law) for raising problems or making embarrassingly low offers
• Not negotiating in places you don't have the upper hand eg estate agent's office, car, the vendor's house. I did most of mine over the phone or via email.

I would also practice on houses you don't much care about first or even on smaller negotiations like buying stuff at a car boot sale. You really need to get some practice in.

You should also definitely get Property Bee to track the price history of the houses you're interested in as well as check on mouseprice.co.uk for their previous sales prices.

brit1234

pardal51 wrote: »

We are looking for in Staines and believe it or not Feltham.

:eek::eek::eek::eek::eek::eek::eek::eek:

I'm looking more Isleworth/Whitton way (otherside of Hounslow).

brit1234

pardal51 wrote: »

Are you saying the flat you bought has increased by 20% in 12 months? Which part of Isleworth?

Don't belief what he has said we massively caught him out before lying on other threads.

As for Isleworth what StiflersMom says is rubbish. That's the area I have been watching for ages, all properties under £250k.

pardal51

$$$ wrote: »

Returning the OP's question. I'd suggest properly reading up on negotiation. This is probably the most expensive thing you ever buy (except perhaps your next house) so £20 or £30 spent on some decent books could save you thousands.

I'd highly recommend anything by Roger Dawson eg:

http://www.amazon.com/Secrets-Power-Negotiating-Roger-Dawson/dp/1564144984

particularly his audio CD of the above if you can get it.

Always always remember that the estate agent is not on your side. They work for the vendor - not you. Similarly you'll get little help from anyone else involved in the process either so you are pretty much on your own.

Always find out why the vendor wants to sell - are they looking for a quick sale or the right price? What extras can they throw in? What is the money going to be spent on? Knowledge is key.

Personally I've had success with these gambits:

• Making low offers but suggesting flexibility
• Ignoring estate agent suggestions of suitable offers
• Only incrementing offers by small amounts (never split the difference evenly)
• Making a big issue out of small things to get extra concessions (and having a long list of them)
• Asking for something in return if I have to make any concession
• Wincing at any price offered by the vendor
• Acting dumb
• Acting forgetful
• Making them wait - going quiet for a few days
• Blaming other people (like wife, dad, uncle, brother-in-law) for raising problems or making embarrassingly low offers
• Not negotiating in places you don't have the upper hand eg estate agent's office, car, the vendor's house. I did most of mine over the phone or via email.

I would also practice on houses you don't much care about first or even on smaller negotiations like buying stuff at a car boot sale. You really need to get some practice in.

You should also definitely get Property Bee to track the price history of the houses you're interested in as well as check on mouseprice.co.uk for their previous sales prices.

Very useful info much appreciated

How would you define the house to "practice"? Wouldn't you get "blacklisted" for further house viewings (time-waster) by a estate agent(s) if you got a negotiation/offers accepted then pull out?