‘Do you think I can secure the house under the asking price, and how low can I go?’ are two of the most popular questions we are asked as a buying agent. During the market frenzy of Covid, securing a home for under the asking price was pretty much an impossible task. This was especially true for the good quality houses in the sought after locations, as the race for space meant demand far outweighed supply. However, with mortgage rates rising since the Mini Budget last Autumn, the tide has most definitely turned now, putting the balance of power in favour of buyers and haggling on price a little more possible.

What we’re seeing at the moment is that the difference between buyer and seller expectations has been steadily growing throughout this year. There is a price correction between the property market peak of 2021 and now. Many sellers believe they’re still in the market of 2022, whilst buyers are thinking more 2020/21, mainly fuelled by the pressures of increased mortgage rates and general cost of living. Purchasers are definitely more wary now as a result, and if they feel anything is wrong with the location or house itself, they want to haggle on price.

According to Hamptons, one of the UK’s largest estate agents, 54% of homes across England & Wales sold below their asking price in July, up from 47% in June and 34% in July last year. Price reductions have also reached their highest level in at least nine years, with buyers achieving a 4.5% discount average last month. We are seeing similar trends, as sellers realise that if they want to sell quickly, they need to be realistic about what is happening in the current market.

Currently, we are securing properties for buyers at guide price or slightly under, which wouldn’t have happened even a year ago. This is because demand in and around the waterside and rural villages of Chichester, Midhurst and Petworth is still as strong as it has been, whilst good quality houses are scarce.

So how can you maximise your chances of having a lower offer accepted?

It’s important to remember that a house is only worth what somebody is prepared to pay for it. Just because it’s been set at a particular asking price does not mean that that is the correct value. There are a number of factors to consider when making an offer, which takes into consideration things like the seller’s circumstances, location and if there are major works that need doing. With this knowledge, buyers can then make an offer – whether at guide or below it. Go too low however, and you risk losing out entirely, which is where the benefit of having a buying agent on side plays a vital role.

Our tips include putting the offer in its best light and explaining the circumstances. 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. 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.

For more information about how Property Acquisitions can help you find your next home in West Sussex, contact Jennie Hancock at info@propertyacquisitions.co.uk.

Our Founder, Jennie Hancock, was interviewed recently by The Times for protective measures on how buyers can deal with badly behaved house sellers. Following a strong few years for the housing market, the industry has reported that some vendors (not all) believe they now hold all the cards, and are bending the rules and changing the goalposts at the last minute, often causing deals to fall through – even as close to when it’s time to exchange. Moving house is one of the most stressful and expensive things one can do in life, so for purchasers who are ready to exchange having paid for surveys, solicitors and other associated costs, it can be devastating financially as well as emotionally when a sale collapses. Of course, there are occasions when a vendor may have to pull out, but when they’re changing their mind for no good reason, it’s generally considered poor behaviour.

So what can buyers do to protect themselves from such a situation? Here are Jennie’s top five self-protection measures…

Offer a quick exchange and a long completion

I have long said that being flexible with a vendor on completion dates can often act in a buyer’s favour, and this is even more applicable in a market with a lack of stock and huge demand. Sellers can panic that they won’t have time to find a new property so pull out. This is especially pertinent with those in their sixties and seventies, who may feel reluctant to let go of a much-loved family home. So what we’re doing more of is a quick exchange to secure the deal, then a delayed completion date of six to twelve months. The critical thing is that the delayed completion date can be moved forward by mutual consent if needed to.

Engage a good solicitor

Engage a good solicitor who is going to be proactive, communicative, and excellent at moving things forward quickly. There’s nothing more off putting to a vendor than a buyer’s solicitor taking a long time.

Suggest a ‘rent back’ agreement

‘Rent backs’ are another good option to give sellers time to find the property they want too. This is an agreement between the buyer and seller that allows the seller to continue to live in the house after completion in exchange for rental payments for a set period of time. A typical scenario would be that we present a cash buyer to Mr and Mrs X, the vendors. We would then say to them ‘They are in a very strong position to buy your house, so if you’re not ready to move yet why don’t they rent it back to you for a year?’ This is often an attractive option for “the older generation of vendors. It stops them having to do a double move. However, it really only works when the buyers are mortgage free, because most residential mortgage providers would not agree to it.

Be a cash buyer

If possible, buyers should try and be cash purchasers. A vendor is less likely to walk away from a cash buyer because they are like gold dust in their eyes. Such purchasers can proceed quickly, are chain free and are less risk of the sale falling through because there aren’t any mortgage affordability tests to go through.

Retain a buying agent

Finally, find a good local buying agent. They will do all the fighting talk on a buyer’s behalf and manage any complications with the seller. Buying agents also provide vendors with reassurance that their client is a serious buyer due to all of the due diligence checks they have to do for proof of funding. This can help minimise the chances of a vendor messing around or walking away, tremendously.

For more information about how Property Acquisitions can help you find your next home in West Sussex, contact Jennie Hancock at info@propertyacquisitions.co.uk.

Our Director, Jennie Hancock, provides her thoughts on how recent years have transformed our lives and where we live.

Will there be a return to the City living again that many are discussing or will we continue our lives as we now know it in more rural locations with good Wi-Fi ? As demand still outweighs supply for the Chichester, Midhurst and Petworth triangle, and buyers purchase off market to secure the good properties and locations, I see this trend continuing.

I did believe after September and the mini budget we would see a fall in activity, but this hasn’t happened. With access to London from Haslemere in under an hour, this patch continues to be a favourite spot as 2023 clients are still very keen to secure those special village homes.

Perhaps we will see fewer under 50’s moving as the equity in their homes is likely to be smaller, meaning they will be hit harder with interest rates rising when they re-mortgage. Whilst more activity will be with those that own their homes or have relatively low mortgages on loan to value which enables their repayments to be less.

With good quality properties in our area and availability low, this is partly down to this area having three large estates – Goodwood, Cowdray and Leconfield – who between them, own a substantial amount of properties and land which are rarely sold. This can be seen as a positive though, as it means that the land around us is kept in excellent condition and being situated within the SDNP.

This is where the moving trends are at the moment, and it will be interesting to see how it continues throughout 2023 and hopefully these properties will kick start and encourage others. Buyers are seeking village or edge of village properties, within close proximity to a pub and a shop and for families, close to good schools, which we are also blessed with in this area. There are also plenty of buyers who sold their homes last year and are now in rented properties with cash in the bank.

I am very much looking forward to an interesting spring and summer ahead.

For more information about buying a home in and around Chichester, Midhurst and Petworth, contact Jennie Hancock on jh@propertyacquisitions.co.uk.