When making an offer, many first-time buyers don’t know where to begin. Successfully negotiating the house price could save you thousands, or even tens of thousands on your property purchase! Read our tips and tricks to find out how to structure an offer, add credibility, and pave the way for a successful negotiation.
First time buyers, contrary to modern belief, are attractive buyers as they are chain free. This means you don’t need to sell a property to release funds. With a little bit of organisation, you can add a lot of credibility that will make your offer stand out. Read the tips below to get started and increase your chances of success!
TIP 1: Disregard the advertised price!
Often, estate agents themselves don’t agree with the price listed by the seller. Ignoring, or, at the very least, analysing the price will encourage you to take a calculated approach and think about the property objectively.
TIP 2: Show an understanding of the property's market value
Look at previous sold homes in the area that are comparable to your chosen property. It is easy to find this information - you can check the price of any sold property via the HM Land Registry website. You can even see for how much the property was previously purchased by the seller 😉
TIP 3: While viewing the property, look for improvements that can be made
Depending on the costs of the repairs, you can factor these into the price of your offer and use this as a negotiation tool to get a better price. If you have the time, make sure to consult 2-3 trade professionals to get a realistic quotation of the costs.
TIP 4: Build rapport with the estate agent
In most cases, you won't be negotiating the house price directly with the seller, but through the agent. The best and easiest way to gain their trust is by showcasing you are a credible and serious buyer. You can do this by taking the relevant documents such as a DIP/AIP and Bank Statements (to show deposit) with you during your initial meeting with the estate agent. Providing copies of these documents physically (or via email when you follow up) will add to the seriousness of your offer.
TIP 5: Ask questions before negotiating the price
If you’ve spent time talking to the estate agent, you’ll be able to ask hard questions and receive honest answers that can help your negotiations. You should always ask why the seller is looking to sell? How long has the property been on the market for? Have other offers been made, and if so, when?
TIP 6: Write specific numbers in your offer
Avoiding rounding up and down to make a “nice” number. Specific numbers such as £178,900 (rather than £180,000, for example) show that you have a studied and calculated offer, and that you probably have a finance strategy to back it up.
TIP 7: Explain why you're haggling down the price
You can include things such as “Property x down the road went for £179,000” or any future improvements like “taking into consideration the cost of re-laying the driveway”. These may seem minuscule but do play a part in adding credibility to your offer, particularly if it is below the listed price.
TIP 8: Make the offer in person or via phone
When you make your initial offer, it's best to discuss things live with the agent. Always follow up the conversation afterwards in writing to confirm your offer, making sure to include numbers and letters for the offer amount, to avoid any miscommunication. [Click here to view a sample letter!]
There you have it! 8 tips to help you compile and negotiate a better offer. Remember - an ideal buyer for a seller is a first-time buyer. Why? First time buyers have no chain and can move fairly quickly - making the process a lot simpler for the seller. Use this as a strength, do some preparation, and you’ll be in a great position to get the best price for your dream home.