Ed Mead

    How to negotiate on a house

    How to negotiate on a house
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    With Rishi Sunak announcing plans for a Stamp Duty holiday extension and floating the policy of 95 per cent mortgages, the boom in house sales looks set to continue apace. So, in an increasingly competitive market, what's the secret to securing the best possible price on a house?

    Firstly, your relationship with the agent is key, even as the buyer. Despite the fact that most agents are paid by the seller estate agents form their primary relationships with buyers. If you want to live in a certain area find the best negotiator - the person you think can persuade a seller to accept your price. And don't be afraid to badger them. They may not work for you but the squeaky wheel always gets the oil. They want the deal as much as you do.

    Secondly, be prepared to pay a buyer’s fee. However unintuitive this sounds your friendly agent will not be able to secure a fee on many of the properties for sale in the area you want, so you’ll never hear about them unless you spend every waking hour scouring websites. But they will most likely know about all of them with some only for sale off market. Suggest to your new BFF that you’re prepared to pay up to 1 per cent as a buyer’s fee if they find the ideal property but can’t secure a share of the fee from the selling agent. This could well unearth a property others don’t even know about and with average selling fees at just over 1 per cent sharing is a rarity. Paying an extra 1 per cent is simply not large in the overall scheme of things and if it’s a good off-market property you might gain from having no competition too.

    My third piece of advice is don’t get emotional. It's very easy to become attached to a property. The pressure of a house purchase can often make it feel as though the house you are considering is the only one that would work for you. A cardinal error that I often see is when excited buyers undersell what they own whilst overpaying on the purchase. Always be prepared to walk away. This will stand you in good stead to secure the best price.

    Getting your sale done first before you begin your search will make you a much more attractive buyer. But keep an eye on what’s coming on the market in your buying and selling areas. You will be buying into the same market in which you are selling: it's a good idea to have a sense of what you are looking for so you can price your own property accordingly. Agents will be familiar with the local market but you are the expert on the sort of property you want to buy and the price you need for your existing home in order to make a move possible. Completing a sale before moving can take the pressure off and stop you from accepting a lowball offer out of fear of losing out on a property you've set your heart on.

    Try and look for the worst property on the best street; it’s an old but well proven adage. Not only will it give you bargaining power when you're negotiating the price, there will also be potential to add value, resulting in a bigger return if and when you do come to sell. 

    Take a long term view. Moving is expensive, financially and emotionally and you really don’t want to be doing it too often. The average moving cycle was five years in the 70s when I started working in property – it’s now 17 years. Make sure your chosen home can perhaps accommodate a new partner and growing family, if you are thinking of starting one.