In The Press… The Spectator
Negotiations are back, as the balance of power shifts from sellers to buyers. The Spectator magazine talks about this topic in their latest issue, and our very own Jennie Hancock at Property Acquisitions is delighted to have been quoted in the piece. It offers a really good insight into how to increase your chances of having an offer accepted.
Here are some of Jennie’s thoughts when haggling on price…
- Low offers can be made, but you risk losing the house if you don’t have all the facts about why the vendor is selling and the local market. Percentage discounts vary on location and circumstance, which is where a buying agent is of benefit, because we would advise the client on what a sensible would be to maximise their chances of securing the house.
- It’s important to know the circumstances of the sale, knowledge of the market and local area, and the true value of the house. It can be quite hard as a buyer to find out all of this information, which is where the benefit of a buying agent comes in. As we act on behalf of the buyer, we find out all of the necessary information so that we can advise on the best offer strategy. For example, if a vendor is selling because of a death or a divorce, they’re keener to move quickly and therefore more likely to negotiate. Often in these cases, they choose the ‘best buyer’ ie a cash buyer who is proceedable, over who is offering the highest price. Whereas somebody who is downsizing or who doesn’t necessarily need to sell right now is more inclined to choose the highest offer over the ability to purchase, and will wait until they do.
- Putting the offer in its best light and explaining the circumstances can often result in having an offer accepted, especially if it’s lower. If you are a cash buyer for example, you are in a very good position in the current market. Vendors, particularly those who need to sell quickly, are choosing the buyer who has the ability to purchase over who is offering the highest price. This is because with funds ready in the bank, cash buyers can move forwards quickly and there is less risk of the sale falling through. Many vendors are specifically asking for cash buyers only as the chances of a mortgage buyer pulling out is higher because of down valuations and the potential to fail their stress test – a term that is used for checking the ability to buy. Another good factor to include is if you are happy to be flexible on a completion date. Exchange can happen as soon as you can, but a long completion date can give a seller more time to find something else. This also then makes them a proceedable buyer, putting them in good stead for their onward purchase. If you are buying via an estate agent they will highlight your situation to the vendor, but if you’re using a buying agent who is acting on your behalf, they will put together a really good case, explaining why your lower offer is sensible and why you are the best buyer for them.
- Some people also write letters, but I have found that the emotional story isn’t as valuable as it used to be twenty years ago. Having said that, it can work if you know the seller’s circumstances.
- However, village houses in sought after quiet locations rarely enter the market, so when they do, buyers pounce. The more unusual or idyllic the property and location, the higher the demand will be. This means the moment there are several parties wanting to make an offer, the chances of being able to haggle on price diminish.
- It is also possible to haggle with a developer. Housebuilders do have flexibility, and will be more inclined to haggle with somebody who is able to complete the transaction quickly, but the best time to negotiate is just before the end of their financial year.
