News & Views Blog

Vendor Research

• Before even thinking of submitting and offer you need to do as much research as possible into the background of why the property is on the market and how long has it been for sale.
• A vendor with a deadline is more likely to negotiate than one who does not have to move. Similarly a property which has been on the market for some months may sell well below its guide price.
• Remember also that the vendor is human... he or she will probably be more prepared to negotiate if you take the trouble to be courteous and show them respect. Discuss why they want to move, what their ideal timescales are and how you can help them in the process. This can be particularly important if they are elderly.

Competition

• You also need to find out what the competition is. Ask the agent if it is worth viewing the property if you only have budget of £x (set discretely below the guide price): if he says no then you know that they feel in a strong position, if yes then it may indicate that there will be room for negotiation.
• When looking around the house ask how many other viewers there have been and how long it has been on the market for.

Hidden Costs

• With this information to hand you must also work out what you are able to bid for a property and what it is worth to you.
• There are many hidden costs that you will have to pay, not the least of which is stamp duty which, at its highest and most penal rate, is charged at 4% of the value of the property. Add to that legal fees, the cost of improvements and moving, then the net funds available to bid with are soon reduced

Final Offers

• How you submit your offer will depend on how the sale is being conducted. “Best & final” offers are submitted in writing and have to be with the agent before the relevant deadline.
• Otherwise a verbal offer by telephone will usually suffice...but make sure that you keep a record of the agent’s name and time of your call. It is also often worth putting a deadline of, say, 48 hours for your offer to be accepted otherwise it is withdrawn: this makes it more difficult for the agent to use this to get other prospective buyers to submit a competing bid.
• Unless submitting a best and final offer (which needs to be exactly that) you should pitch your opening offer at slightly below the price that you would be happy paying.
• It is quite normal for an agent to ask for a better bid and, that you have offered below what the vendor is expecting, may well help to readjust their sights accordingly. Offering the guide price first time is not normally a good tactic!

Room for Negotiation?

• The agent has a legal responsibility to report your offer in writing to their client. Beyond that the vendor decides on what course of action should be taken, often as advised by their agent. Particularly in the current market you need to be clear as to whether you already have a mortgage agreed in principle and whether your offer is subject to survey or any other conditions.
• The cleaner your offer, then the stronger your negotiating position is and the more likely that an offer below the guide price will be accepted.

If all this fills you with horror, then you can always ask a buying agent to represent you in the process, but otherwise the best advice is do not set your heart on a house until the vendor’s signature is on the contract....only then do you have certainty!