Negotiating a House Price (Looking for Tips/Experiences)

DanSpooner

Hi All,

Me and my partner and looking to purchase a house locally in the next month or two. We're keeping an eye on a couple of houses that have been listed for a while and that we feel are listed at a price a little above their worth. I just wanted to hear from some of you on the best way to start a negotiating of price on a house.
These are the two main questions I have:

- When to start negotiations? If we saw a house which ticked all of the boxes and still felt the same at the viewing, then is it best to start negotiations there and put in an offer? Or is it generally best to tell the estate agent that you'll 'go home to think about it' and then submit an offer after?

- How low to go with your first offer? Lets say we see a house which we think is listed at price which is on the higher end of what we believe it's worth and is out of our budget at the listed price, but we’d like to put in an offer which is within our budget ... How low would you start? For example if our max was £400k and a house was listed for £425k, would it be best to go in initially with £400k as that's a more respectable offer? Or start lower (say £390k) and bid up to 400k? (I know both could be flat out refused but just looking for best practice here).

We're first time buyers (no chain), based in South East London and looking at 3 bedroom houses (semi detached or terraced) if that information helps. I know there are other factors like how long the house has been listed for, similar house prices in the area and that every house/situation is different etc. I was just hoping to hear from some of you on your experiences with negotiating or any tips/tricks that people have found worked for them.

eddddy

The best way forward might be to find out as much as you can about the sellers.

For example...

• Are they desperate to move as quickly as possible? If so they might accept a lower offer from an FTB who will move quickly.

• Or are they a bit indifferent about moving? In that case, maybe their property's been on the market for 2 years, because they won't consider any offer under the asking price.

'Make friends' with the EA and see what you can find out. But bear in mind that the EA will be playing a bit of a game as well, just like you.

But the EA wants the property sold (in order to earn their fee), so they should give you some helpful advice.

DanSpooner

eddddy wrote: »

The best way forward might be to find out as much as you can about the sellers.

For example...

• Are they desperate to move as quickly as possible? If so they might accept a lower offer from an FTB who will move quickly.

• Or are they a bit indifferent about moving? In that case, maybe their property's been on the market for 2 years, because they won't consider any offer under the asking price.

'Make friends' with the EA and see what you can find out. But bear in mind that the EA will be playing a bit of a game as well, just like you.

But the EA wants the property sold (in order to earn their fee), so they should give you some helpful advice.

I actually never thought of the relationship with the estate agent as much... Making friends with them is a really good idea for information. Is it best to be quite open with them about budgets? For instance if we spoke to the estate agents before viewing a £425k property and told them our budget was £400k, would they even take us to view it? Or just stay vague about budgets?

[Deleted User]

It really does vary from house to house depending on what your vendors are like and their circumstances.

People who are in no rush to sell are usually more stubborn and won't budge on their asking price, compared to someone who needs a quick sale and may be more willing to negotiate.

Another thing to consider is how the vendors might react to lowball offers on their property. Go in too low and they may take offense and will tell their agent to not even entertain any further offers from you, meaning any chance of getting that house are out the window.

If you come across your dream home then you will want to tread more carefully when going in low, or risk annoying the vendor.

If its a 'well this is nice, but not a dream home' house, then its more worth the risk as you won't be as upset if you lose it.

Another thing to consider is how long the property has been on the market for. If it was only listed a week or so ago then you're less likely to get a low offer accepted as its early days and the vendors will most likely want to hold out for a higher offer from someone.

What you think the property is worth really has nothing to do with it. It all comes down to what you're willing to pay, and what the vendor is willing to accept.

DanSpooner

Deleted_User wrote: »

It really does vary from house to house depending on what your vendors are like and their circumstances.

People who are in no rush to sell are usually more stubborn and won't budge on their asking price, compared to someone who needs a quick sale and may be more willing to negotiate.

Another thing to consider is how the vendors might react to lowball offers on their property. Go in too low and they may take offense and will tell their agent to not even entertain any further offers from you, meaning any chance of getting that house are out the window.

If you come across your dream home then you will want to tread more carefully when going in low, or risk annoying the vendor.

If its a 'well this is nice, but not a dream home' house, then its more worth the risk as you won't be as upset if you lose it.

Another thing to consider is how long the property has been on the market for. If it was only listed a week or so ago then you're less likely to get a low offer accepted as its early days and the vendors will most likely want to hold out for a higher offer from someone.

What you think the property is worth really has nothing to do with it. It all comes down to what you're willing to pay, and what the vendor is willing to accept.

Thanks. So we're in quite a good position ourselves where we're in no real rush for a house. We'd like one but we're also quite happy to top up the money we have whilst we look for one. I guess what we're looking to do is keep an eye on these out of budget houses and see if we can reduce them into our budget by negotiating. If they don't budge then that's fine, but if they did then we'd happy take the house.

OldMusicGuy

We have just put our house on the market. Like the other posters said, make friends with the EA. If they are any good, they should have a good idea of the seller's situation and how they are likely to respond to offers.

In our case, our house was somewhat difficult to price. After long discussions with the EA about similar properties in our area, we agreed a price but we are open to offers, and the EA knows that. We wouldn't want to give the place away but for a good buyer we will certainly consider offers in a certain range.

We aren't desperate to sell so anyone making silly offers will be told to get lost. But we will be discussing any reasonable offers with the EA to decide if it makes sense to go with them. So if you were buying from us, a discussion with the EA would be the way to go before you make an offer. They would give you a sense of the "wiggle room" if there is any, and I would hope any decent EA would be able to do that.

The problem you may face is if you go in with a mindset of "we will be able to negotiate people down" then that might cause you a problem when you find a house you really, really want and for some reason the sellers don't want to budge.

DanSpooner

OldMusicGuy wrote: »

We have just put our house on the market. Like the other posters said, make friends with the EA. If they are any good, they should have a good idea of the seller's situation and how they are likely to respond to offers.

In our case, our house was somewhat difficult to price. After long discussions with the EA about similar properties in our area, we agreed a price but we are open to offers, and the EA knows that. We wouldn't want to give the place away but for a good buyer we will certainly consider offers in a certain range.

We aren't desperate to sell so anyone making silly offers will be told to get lost. But we will be discussing any reasonable offers with the EA to decide if it makes sense to go with them. So if you were buying from us, a discussion with the EA would be the way to go before you make an offer. They would give you a sense of the "wiggle room" if there is any, and I would hope any decent EA would be able to do that.

The problem you may face is if you go in with a mindset of "we will be able to negotiate people down" then that might cause you a problem when you find a house you really, really want and for some reason the sellers don't want to budge.

That's great to hear from someone selling. I almost always saw the Estate agent as the gatekeeper or the middle man who would work only in the sellers/their own interest but I can see how working can work in our advantage and they're really the only people you can really get the key information from so it's in our interest to befriend them.

Completely agree with what you finished on. We're looking for houses up to 400k generally but there are some slightly out of our budget which we like the look of and we would like to at least try to get but we'd be realistic at the same time. They need a bit of work and it's in areas I'm interested in so I'd probably use that as the way in to ask for a cheaper price, I just wasn't sure how to start - I'm not much of a haggler!

Soot2006

I am in a similar situation as OP. I have been open with all the EAs, and I found they couldn't care less about our circumstances and they don't seem to mind wasting their time. Our budget is ~ £450,000. We have seen £400,000 to £500,000... I suppose EAs know the negotiation game better than us + they probably live in hope we fall in love with a more expensive one and somehow make it work. My understanding is that proceedable buyers are in high demand and likely that the EA will help with negotiations as long as they are realistic.

getmore4less

How low would you start? For example if our max was £400k and a house was listed for £425k, would it be best to go in initially with £400k as that's a more respectable offer? Or start lower (say £390k) and bid up to 400k? (I know both could be flat out refused but just looking for best practice here).

What if the research(you have done this?) shows the place should be marketed at £375k with a target sell between £350k and £375?

Read this thread and post #11 in particular.
https://forums.moneysavingexpert.com/discussion/5988318/comments-on-this-house

Get to know your market, analyse the land reg data and rightmove data then track all properties as they sell through to see what other people are paying for places, as new places come on you have a pool of daya to get a far better idea of what it is worth.

You should have been doing this from the day you thought you might buy.

it is time consuming but it could be the best hourly rate you ever get in your life if it saves you £1000s

I actually never thought of the relationship with the estate agent as much... Making friends with them is a really good idea for information. Is it best to be quite open with them about budgets? For instance if we spoke to the estate agents before viewing a £425k property and told them our budget was £400k, would they even take us to view it? Or just stay vague about budgets?

problem is if you let them know you have £400k and look at a place that's worth £350k but on at £375k you have to resist getting pressured to pay more than £350k.

Me and my partner and looking to purchase a house locally in the next month or two.

Unless you have been looking & researching that is optimistic time to establish value within the market and a place come up
You may get lucky.

If you found one you like research hard now to work out your offer don't use the asking price.

ognum

There are many reasons sellers will not drop their price.

They have a large mortgage to pay off
They need a sum of money to move on to another property and without it they won’t move.
They are a separating couple and one will only sell at a particular place
They have a belief in the value of what they own
They are simply not in a hurry and don’t need to move
They are releasing equity and downsizing and it’s not worth it at a lower price.

So, you may or may not move the vendor on their price, all you can do is try.

DanSpooner

getmore4less wrote: »

What if the research(you have done this?) shows the place should be marketed at £375k with a target sell between £350k and £375?

Read this thread and post #11 in particular.
https://forums.moneysavingexpert.com/discussion/5988318/comments-on-this-house

Get to know your market, analyse the land reg data and rightmove data then track all properties as they sell through to see what other people are paying for places, as new places come on you have a pool of daya to get a far better idea of what it is worth.

You should have been doing this from the day you thought you might buy.

it is time consuming but it could be the best hourly rate you ever get in your life if it saves you £1000s




problem is if you let them know you have £400k and look at a place that's worth £350k but on at £375k you have to resist getting pressured to pay more than £350k.




Unless you have been looking & researching that is optimistic time to establish value within the market and a place come up
You may get lucky.

If you found one you like research hard now to work out your offer don't use the asking price.

Thanks for the reply. We've been doing all of the land registry/zoopla/rightmove sold prices to compare roads, areas etc. We've been doing this for around the last year and we already rent in the area (I was brought up here all my life) so research wise we have a good idea of a good deal or a place which feel could be negotiated on. Our research really is the reason why we're looking to negotiate on certain houses as we feel that due to competition, work required or the length of time it's been up, there may be room to move on the price.

We'll definitely be wary of the pressuring tactics the EA's use. We're in no rush for a house so we're probably going to place lower offers on houses out of our budget (and if we get it, take it) or wait until the right one comes along and keep adding to the pot we've already got.