Negotiating to buy your dream home is very much the same as negotiating to buy your next car. The only real differences are the number of zeros on the end of each figure and the length of time it takes to go from ‘a deal’ to actually buying it!
The best negotiators do three things. They decide what they are prepared to pay. They consider the mindset of the other side in the negotiation and they set parameters which, if not achieved, will result in them walking away. Without a belief that you can take or leave a particular deal, you aren’t negotiating, you’re just delaying the inevitable.
Of course, buying your dream home means, by definition, that your heart is driving this at least as much as your head. You need to suppress your desires and keep a cool head. Don’t allow the day dreams and wishes to cloud your judgement.
Here are our Top 10 Tips for conducting a successful negotiation to buy your new home;
- Know the local Area. If you know what has sold where and for how much you are best placed to assess the owner’s reasonable expectation on price. Zoopla, Rightmove and Prime Location all have data showing what property has sold and for how much.
- Know current Market Conditions. If you are looking around, you’ll quickly get an idea of what is selling and what is not. Keep an ear to the ground and build a relationship with local estate agents - but remember, they work for the owner (not you) and most agents are always ‘optimistic’!
- Know the Seller’s Reasons for Sale. A seller that has found a home they want or who needs to move into a new catchment for a school year is motivated! They are more likely to accept a lower offer if a buyer can move quickly. This is important information. Take time to speak with the seller during viewings and don’t be afraid to ask why they are selling.
- Be Prepared! As we mentioned in (3) above, a motivated seller might be prepared to drop his price if a buyer can move fast. That means you need to be either a cash buyer or have a ‘mortgage offer in principle’ and be ready to go.
- Keep your cards close to your chest. Don’t tell the seller you can’t live without their home! Of course, if you like it leave them in no doubt that you are seriously interested. Let them know if you have a mortgage offer ready to go. Let them know that you are ready to buy - but don’t gush! It just implies that you’ll buy at any price.
- Always ask what a seller is prepared to accept. If they give you a figure, offer less. You may need to justify this as some sellers might take it personally if, having been asked to state a price, they are faced with a counter offer. So, be subtle and have some justifications for the lower offer. If you can’t get a figure, go in low with your first bid. It’s likely that an experienced seller is expecting this and if the offer is refused it gives you a great opportunity to then ask, with some justification, “so what would you accept?” If they accept your first low offer it could have been lower!
- Try to keep talking. A discussion between formal written offers is best. It gives you a better idea of the seller’s mindset and temperament. People can get quite defensive when selling their home and some take an aggressive offer personally. Keep a smile on your face.
- Don’t just concentrate on price. Sometimes a quick commitment or the willingness to delay a completion can be just as important as money. This is where knowing the seller’s expectations comes in. And when price is set, or negotiations are at a standstill, start talking about fixtures and fittings. That garden shed or greenhouse that is excluded from the sale might cost you £3,000 to buy new but to a seller its something else to dismantle and take with him and the purchase price has long since been forgotten. The same goes for white goods in the kitchen, carpets and curtains. Be creative.
- Remember to allow for the hidden costs. Things like stamp duty, mortgage indemnity premiums and solicitor’s fees add up. So make sure you don’t get stung with unexpected costs.
- Keep the ball rolling. Once you have a deal, don’t just leave it to the professionals. Make sure your solicitor has all she needs to get on with it. Speak with her regularly and speak to the seller to reassure him of progress and your commitment. If a seller is speaking to you regularly, it’s harder for him to gazump you later!
Buying a home is probably the largest expenditure most people make in their lifetimes. It’s critical, therefore, to negotiate well. So remember, prepare for the task at hand. Get your mortgage and funds in place and don’t be afraid to walk away if the deal doesn’t stack up.
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