Haggling for a lower house price can be uncomfortable in the best of times, but first-time buyers right now may feel like they have no power at all, with reports of house prices rising to record highs in 2020.
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If you're a first-time buyer and the house prices are making your eyes water, don't despair: you shouldn't give up on the idea of negotiating for a better house price just because prices are rising overall. Phil Spencer's team of property professionals from Move IQ have some handy advice – you can watch Cat King's top tips below. Follow these tips and could well be able to negotiate down, even in 2020.
1. Don't be afraid to be nosy
If you haven't been given all the information about the house you're looking at by the estate agent, don't be afraid to ask. How long has the property been on the market? Was the price reduced at any point, and was the house advertised by a different agent before the current one? These are crucial bits of information that will give you an idea of whether the situation is ripe for haggling. Remember: the estate agent is working on behalf of the seller not you, so you may need to be inquisitive to get the full picture.
2. Always start low
This is the cornerstone of negotiating house prices: always start with an offer that's below the asking price. Obviously, don't be unreasonable – asking for five to 10 per cent off is usually fine, but not half the property's price, obviously. Never offer above the asking price, as this will make you appear too keen.
3. Write a professional-style letter
This is an important next step in the process, if you are genuinely interested in the property. Buyers are often advise to submit all offers in writing, but you should bear in mind that this doesn't mean simply writing a quick email stating your offer. You'll need to put together a thorough, well articulated letter several paragraphs long, demonstrating your knowledge of the local market, your proposed time frame for completion, all the numbers (make sure your spell out the sums as well, for maximum clarity), and your solicitor's details. Such a letter will make you look serious and leave no room for misunderstanding.
4. Never offer too much
Even if you want the house badly, don't lose your nerve. If your first offer gets rejected, you can increase or offer in small increments, but never go over your budget, and avoid offering over the asking price unless this is your ultimate, one-of-a-kind dream home. If you know that no one else has put in a offer, you're in the stronger position, so stick to your guns and be patient.
5. Reconsider where you're looking
If, on the other hand, you keep losing out on houses in your chosen area because they consistently generate bidding wars, be prepared to reconsider the location you're looking at. It may be that you simply can't afford the size/type of property you need in the area you're set on, but you may well find something in a cheaper area nearby. Do your research on local house prices and visit places you haven't yet consider – you may find something much better value in an unexpected location.
Comparing mortgages
Looking for a mortgage as part of your house purchase? We've teamed up with mortgage experts Habito – use their free comparison tool below to see how much you could borrow.
Read more:
- Negotiating house prices: even more tips
- Mortgages for first-time buyers
