In This Guide
Apply for a mortgage
Buying at auction
Buying in Scotland
Conveyancing
Find and view
Negotiate
1. How much to offer
2. It pays to negotiate
3. Buyer and seller positions
Plan your purchase
Success and failure
Surveys and valuations
To buy or not to buy
Negotiate
Buyer and seller positions
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When you are negotiating, your position and that of the seller can greatly affect the outcome of your discussions. If you are standing on their head, then you have a much better chance of success. Similarly if you try and take refuge beneath a table, you won't project the air of confidence necessary to get the best deal possible. In all seriousness, there are some factors that can strengthen your hand as a buyer, as well as some reasons that may persuade the seller to let the property go at a reduced price:
Apart from meeting the asking price, there are three main things
that can encourage a seller to accept your offer:
1. Not being part of a chain.
If you are not relying on a chain of sales in order to be in a
position to proceed with the sale, this is usually a big advantage
for you. It means that the seller can set a completion date and
expect with reasonable confidence that everything will go through
in time. Whether you should inform the seller from the outset
or wait until you wish to strengthen your hand is a debatable
question. There are various groups of so-called 'hot buyers' who
are not part of a chain:
- First time buyers - for obvious reasons
- People who have already sold or exchanged contracts on their own property
- People who have nothing to sell - they may be moving to the country, buying a second property etc.
2. Pre-qualification.
This is making sure that a lender
will offer you the amount of money that is required to buy the
home. At a minimum, you will have gained an agreement
in principle from a lender, subject to a valuation.
Visit the mortgages
section for help with choosing a provider and product. You
can actually get a letter from the lender advising the seller
of the fact that they are willing to advance you the necessary
sum of money to buy the property. Again, the main reason for doing
this is to show that you are a serious buyer who will be in a
position to guarantee swift progress with the purchase process
once the sale has been agreed.
3. A large amount of work being required
on the property.
Sometimes this is accurately factored into the price and sometimes
it is not. It can be possible for you to negotiate the price more
effectively if you make an issue of any repair work and encourage
the seller to think that the property is genuinely overpriced.
Basically, try to assess how keen the seller is to sell the house
quickly. The more urgent they are, the more likely they are to
accept less than the asking price. Try to find the answers to
the following questions:
- What are the current market conditions?
- How long has it been on the market?
- Is it being 'priced to sell'?
- Has the asking price been dropped since it went on the market?
- What season is it? (there is greater demand in spring and summer, so you may be able to drive down the price in the winter)
- Do they have any reason why they may need to sell quickly? They may need the funds to be able to a complete the sale on a house that they are buying.
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