Negotiating a house price? How to bag a great deal
10th September 2019
Now could be the perfect time to negotiate a great house price.
In July 2019, the average asking price for a property on the market fell by 0.2% - the first monthly fall we’ve seen this year. (1)
And with so much economic uncertainty surrounding Brexit, it’s not a given that the housing market will rebound any time soon.
Here’s what to do to if you want to get yourself a deal.
How to negotiate a house price
If you’re going to make a low offer, you need to build a case for the asking price being too high.
And that starts with some homework.
Check out how much similar homes are on the market for locally, as well as how much similar homes have recently sold for. You can do both bits of research online, with Rightmove, for example.
It’s also important to find out how long the home’s been for sale. If it’s just come on the market, it’s unlikely that the seller will be open to negotiation. So if it’s a slow market, you could wait a few weeks, or even months, until they realise they may not sell at that price.
Remember to highlight your benefits as a buyer. If you’re a first-time buyer with no onward chain, you could be a more attractive proposition for a seller looking to complete the sale quickly. So make that point during your negotiations.
And if you’re a cash buyer, a seller will probably like you even more as you won’t need to go through all the hoops of getting a mortgage. Make sure you flag that up too.
As for how much to offer, a general rule of thumb is 5-10% off the asking price.
How to negotiate a new-build house price
There’s often an assumption when buying a new-build that you have to pay the full asking price. But new-build developers may well be as open to negotiation as any other seller.
Again, you’ll have to do your research if you want to make a credible offer. Find out what other new-builds of a similar size are on the market for locally and what selling prices have been like.
Make sure you know how long the home’s been on the market and how many properties the developer still has to sell.
Some builders don’t always have the finances in place to finish off a development, so negotiating a quick sale could help them unlock the funds they need to complete it.
How to negotiate upgrades when buying a new home
When a developer wants to sell quickly, they may be more easily persuaded to throw in some upgrades.
In reality, it doesn’t actually cost that much for them to upgrade your kitchen or put down better flooring, as they usually buy in bulk.
So find out as much as you can about the developer and the local new-build housing market.
Sometimes a developer might be more amenable to offer you a few upgrades if you’re chain-free or have a mortgage in principle.
How to negotiate a house price down after a survey
Another chance to negotiate the price down is after you’ve had a homebuyer or full building survey done.
These types of surveys often reveal defects, and if they’re expensive to fix you’re quite justified in asking for a reduction.
Get some advice from your surveyor about how much the repairs would cost so you know how much to lower your offer by.
Stick to your guns if the problem’s serious and you still want to proceed with the purchase. If the buyer isn’t happy with your new figure, ask if you can send an expert round to give you a formal quote.
How to negotiate a house price before you exchange
An agreement to buy a home isn’t legally binding until contracts have been exchanged.
So you could try lowering your offer before you exchange.
You’ll need a good reason, though. It may have taken a particularly long time to exchange and house prices have since dropped, for example.
You’re in the strongest position to lower your offer just before exchange if you’re at the bottom of the chain as you've got nothing to sell.
Think very carefully about trying to negotiate a lower price just before exchange. It may upset the seller at a time when emotions can run very high. Don’t forget they’re not obliged to sell their home to you, so play fair.