How to increase the chances of having your offer accepted
Not so long ago buyers were treating house-hunting as a blood sport – price ceiling-shattering bids and gazumping were commonplace everywhere from the Cornish coast to the London suburbs to the Lake District.
But six months is a long time in property. Following the debacle of the mini-Budget and amid rising interest rates and soaring living costs, not to mention looming recession, the power balance in the market has firmly shifted. Vendors can no longer sit back and wait for the offers to pour in.
Buyers who don’t have to move are increasingly taking a wait-and-see approach. Those still up for a move are determined not to overpay, often hoping to factor in future price falls to insulate themselves against negative equity. Knight Frank forecasts that prices will drop 10 per cent in the next 24 months.
As a result, buyers are having to re-learn the fine art of haggling – according to industry body Propertymark 69 per cent of agents saw most sales agreed at below asking price last month, compared with a low of 15 per cent in March.
But vendors can be tricky beasts. Some see negotiation as just part of the game. Others already think their asking price is a steal and will be infuriated by a lowball offer. Understanding how the land lies is crucial for a successful negotiation, and buyers should ask two key questions, says Richard Freshwater, a director of Cheffins estate agents in Cambridge: is anyone else interested in the property, and how long has it been for sale?
‘This will give a good gauge on whether there is wiggle room in terms of price,’ he says. If other buyers are in the picture a low offer is unlikely to succeed. If the property has only just gone up for sale (or just had its price reduced) the vendor will want to take the temperature of the market before doing a deal.
If, on the other hand, a home has been languishing on the market for months, the vendor may be fed up – or desperate – and ready to consider an offer, particularly if they have found a property they want to buy.
‘Pitching a low offer has to be handled very carefully,’ warns Freshwater. ‘I have seen situations where buyers have put in too low an offer and the vendor has decided that under no circumstances will they sell to them. Not only have they been offended, but it has also brought them to question the buyers’ credibility.’
You will need to explain your offer if you want a vendor to engage, citing recent local sale prices and the state of the local housing market. ‘Always justify your offer or you will look like a chancer,’ says buying agent Anto Clay of Stacks Property Search. ‘I would advise against criticising the decoration of the property or suggesting it is overpriced. Be very diplomatic when negotiating; no good will come of causing resentment at this stage.’
Many agents caution against attempting to knock off more than 10 per cent of the asking price to avoid causing offence. Property portal Zoopla reports that the average discount against asking price in the UK right now is 3 per cent, although it expects this to rise next year as the market continues to stutter. ‘My advice to buyers would be to never go below 20 per cent below asking price, though,’ says Nick Austin, sales negotiator in RiverHomes in south-west London.
Offers should be made in writing to the agent, and Nick Karamanlis, founder of Elliot Leigh Residential, says the devil can be in the detail. ‘Sometimes a minor sob story works well,’ he says. ‘You have missed out on a few and this is all you can stretch to but what you will do is perform and to a good timescale can do the trick.’
Jennie Hancock, of Property Acquisitions in West Sussex, also advocates a personal touch. ‘In the summer I acted for a client in a sealed bid and their offer was accepted due to a letter we wrote for the vendor,’ she says. ‘Our buyer’s parents had lived in the next village and she had grown up in the area. Having since married and had children, she [told them she] wanted to return to her roots.
‘The sellers remembered her parents and really wanted our buyer to secure that dream. So they accepted the offer, which wasn’t the highest.’
The other thing you can do to make your offer stand out is show you mean business. Carol Peett, managing director of West Wales Property Finders http://www.westwlespropertyfinders.co.uk, suggests submitting proof of funds – whether you are a cash buyer or have a mortgage in principle – with your offer to show you are ready to jump to it.…..
The Spectator – 13th December 2022 – https://www.spectator.co.uk/article/a-house-hunters-guide-to-haggling/
If you are looking to buy a property in Pembrokeshire, Carmarthenshire or Ceredigion, give West Wales Property Finders a call on 01834 862816. We can find your perfect property for you whilst saving you time, stress and often money too.