Negotiating house prices: your key guide from the Mortgage Advice Bureau

You might be hoping to take advantage of the current stamp duty holiday - and you need to know the exact steps to follow to secure your dream house. One of these steps is negotiating on price.

Before the viewings

Know the market: Keeping an eye on the local market is key. If similar properties in the area aren’t selling quickly, or selling below guide price, you can sensibly offer less than is being asked. Property listings are in the local press and online at Rightmove and Zoopla. These sites also give the last sale price for a property, and the most recent prices paid for homes on the same street. It the next door sold for £25,000 less last year than your vendor wants today, use this information in your negotiations.

Consider the vendor’s financial position: Knowing what your vendor paid for the property can be incredibly useful. For example, if they bought the house more than 15 years ago, it’s likely they’re sitting on huge gains with a much smaller mortgage. They are likely to be more flexible about what they would accept.

During the viewings

Careful talk: Use FaceTime with vendors to find out about their situation. Why are they moving and where to? Find out how urgently they need to sell. If they’re trying to move to a better school catchment area, they’re more likely to want a quick sale than an older couple who are downsizing. And if they have already agreed a sale on their next home, they won’t want to lose out for the sake of negotiating too hard.

Just ask: It won’t always work and you may not always get a truthful answer, but asking the vendor or estate agent what is the minimum price they would accept could shift the goalposts. If you don’t ask, you’ll never know!

Sell yourself: Use your situation to your advantage. Tell the vendor if you are a mortgage-approved first-time buyer, or a cash buyer. Vendors can often be sentimental about what was their family home and it doesn’t hurt to help them picture how you too would love it. Tug on those heart strings rather than loosening the purse strings.

Making the offer

Putting in an offer: Once you’ve done your research, prepared your vendor’s mindset and set your own limits, make the offer. Remember, your vendor has already a minimum price in mind.

Start low: Most vendors will expect lower initial offers and the asking price will often reflect that, but you’ll have a good idea how much you can push it with your opening offer. If you know there are rival bids, be prepared to lose out if you bid below the asking price.

Make your second bid specific: If you get turned down, ask for a counter offer. Pick a figure between your initial offer and their counter offer. Don’t choose a round number - opt for something specific, say £154,650 rather than £155,000. It implies this is your limit (your maximum loan amount) and can sway some vendors minds into agreeing, fearing you may walk away.

Ask for giveaways: It is not unreasonable to ask for things like white goods to be included with the sale. If you’re a first-time buyer, this can save you a lot of money. It can help the vendor as they have fewer items to move.

Make your third offer final: If your vendor is not shifting their price and you don’t feel the property is worth that, adapt your bid but explain it is a final offer. If it gets to this stage, it’s likely you’re the only person bidding. If the vendor comes back in a few days, they’re selling to you, rather than you buying from them, and you can afford to be confident in any further bids.

If you would like to talk to someone in more detail, call Rachel Zschieschang on 07375 886347 or visit our website at mortgageadvicebureau.com/cambridge.

Because we play by the book we want to tell you that your home may be repossessed if you do not keep up with repayments on your mortgage. There may be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances, but a typical fee is up to 1 per cent of the amount borrowed.

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