Getting a good house price is a challenge, especially this summer of all summers. Phil Spencer* to the rescue: the property expert and presenter has a wealth of experience in advising first-time buyers on negotiating house prices effectively – and in a way that will put them in a strong position without putting off sellers.
With mortgages difficult to obtain and larger deposits needed, first-time buyers do need to know how to negotiate house prices more than ever, but there really is a right and a wrong way to go about it. Follow the tips below to make sure you get it right – and find more at Phil Spencer's blog, Move IQ.
1. Phil says: do your research
Negotiating house prices from an informed position is so much easier than just trying to get a lower price without having done your research. Land Registry information is freely available online, and that includes sold prices in the area you're looking at. Make sure you're researching comparable properties: there's no point comparing a one-bed flat in city centre with a suburban family home, for example.
2. Don't seem too keen – without appearing uninterested
If you've found your dream home, you might be tempted to show your excitement to the seller/estate agent, but that's a big mistake. The estate agent is working on behalf on the seller, and will do everything in their power to negotiate a higher price. So, hold your cards close to your chest and contain your excitement. You should still signal your interest, but in a calm way: make it apparent that although you are interested, you are prepared to walk away from a bad deal. And, if you are submitting multiple offers on the same home, don't submit your second offer immediately, as this could be interpreted as desperation.
3. Always submit offers in writing
As soon as you get to the numbers stage of the negotiating process, submit all offers in writing, always. This will help avoid any confusion (or, in some case, wilful misremembering on the part of seller or estate agent). This is especially important if you're playful the long game and are starting with a low offer you know will get rejected. You – and the seller – will need the email trail to keep track of the process.
4. Don't overspend – ever
It may be tempted to put in a higher offer just so that you can secure the home, especially if there's interest from multiple buyer. Very occasionally, when the home ticks all the boxes for your dream home, it may be worth going a little higher than you had planned, but that decision will need to be weighed very carefully. Will this mean you won't be able to furnish the place to the standard you'd like, or that you'll need to make other sacrifices financially? Never panic and submit an offer you'll regret, even if you're submitting a sealed bid. Only offer what you'd be comfortable paying.
5. Make yourself attractive as a buyer
This is an invaluable card during the negotiation process. Most sellers want buyers who come without complications – everyone's ideal buyer is chain-free and will pay cash. If you're a first-time buyer, you have the former in your favour, though likely not the latter.
Which is why, especially now that buyers are under more pressure from mortgage lender, it's important to reassure sellers with an agreement in principle that shows that you're ready to go and won't be rejected for the mortgage on the house. Speak to a broker, such as our partner Habito, to see how you should go about obtaining one. Use their free comparison tool below to begin your mortgage application process.