How to negotiate a house price.
In this article you will find five things not to do when negotiating a house price. It’s an emotional process if you found your dream home, so be sure not to let your emotions take over. Don’t ignore your research, knowing vital property specific and local area information about somewhere you’ve set to call home is too often overlooked.
In the long run don’t ignore the sales background. You don’t want to end up paying more than you should, so ask the following questions: how long has the property been on sale with a current agent? Was it for sale with another agent before? has the price been reduced while on the market and if so why? have there been any offers and if so what happened? Don’t show your hand if you want to haggle the price down. Always assume the first offer you make will be rejected, this is an important stage in determining the reaction of the seller. Ask the seller to make a counteroffer, if you’re asked to pay a lighter amount you’ll be able to negotiate that.
Don’t just make your offer verbally, always submit your offer in writing. This is important as it will help to avoid any potential misunderstandings. When you write your offer it’s worth including the following points: a paragraph outlining your search history. Demonstrate you know the market right. The figure in numbers and words to ensure there’s no miscommunication. Include the details of your solicitor and a letter confirming they are working on your behalf. Provide proof that you’ve got thumbs ready and in place. Outline your expectations if the offer is accepted, for example you want no other viewings to take place and no other offers to be considered. When you’d like the purchase to complete and also a letter from your mortgage lender. What fittings you expect to be included for the price and finally sign-off your letter confidently. By this you could include a personal message to the seller outlining your hopes on how you expect this will be your new home.
Avoid offering over the asking price if your initial offer has been rejected. Ask your estate agent why, get as much information as you can.There are typically five reasons for the offer being rejected, including when the seller: receives higher offers, wants the asking price, doesn’t think you have your finances organized, wants to move in a short period of time or rejects your offer being based ‘subject to survey’ or other contingency. If your offer was rejected for a higher offer, ask yourself: can you beat their offer? And do you want to? Be aware though, your lender will organize a valuation on the property, so do check that the final offer you make is one that is still reasonable and you aren’t paying ‘over the odds’ or it may be down valued by your lender and you could lose the sale after spending on conveyancing and a survey. A back-and-forth around pricing and offers is normal, but don’t put yourself at risk. If you really can’t afford it or can’t come up with the extra money, it’s better not to risk it. Don’t just increase your bid, you would be bidding against yourself if no one else is actively trying to buy your house. You simply need to make your second offer as attractive as possible. Only offer more than the asking price, if you know someone else has offered the asking price or if you’re really desperate to get this property. This is some useful insight on what to avoid.