Nearly half of homebuyers have attempted to haggle down the price of their property purchase since March.
A survey by online estate agent Strike found that since lockdown began, some 45 per cent of sellers questioned had buyers ask for a reduction in sale prices, most commonly ranging from a 5 per cent to 10 per cent drop.
But despite buyers appetite for a deal, the estate agent’s research suggested that not all sellers are willing to accept a lower offer. While a quarter would consider a reduction between 5 per cent to 10 per cent on asking price, around a third say they wouldn’t accept a lower bid at all.
This means that buyers hoping for money off will need their best negotiating skills, but also that sellers may end up forgoing a sale that could put them in a better position to move by refusing any discount at all.
Some 45 per cent of sellers have been asked for a reduced price by buyers in recent months
Sellers’ refusal to budge reflects the property market experiencing a mini-boom following the lifting of restrictions on moving home and the Chancellor’s recent cut to stamp duty.
Successfully chipping 5 to 10 per cent off a purchase price could save buyers tens of thousands of pounds. A successful reduction of 10 per cent on Nationwide’s average house price of £245,747 would result in a saving of £24,574, while a 5 per cent discount is £12,287.
Unsurprisingly, the area most likely for buyers to ask for a price reduction is London, where 70 per cent of sellers say they’ve been asked to lower their property prices.
The property market in the capital has lagged behind those elsewhere in the lockdown bump upwards in activity.
Meanwhile, buyers in Northern Ireland, the South West, the South East, the West Midlands and Yorkshire are less likely to ask for a cut price.
Of those buyers who would not accept a lower offer, just over half are confident that they can make a sale this year – and almost one in five say they have had more interest in their property than they expected.
Sam Mitchell, chief executive at Strike, said: ‘Now that restrictions have been lifted, property demand is booming.
‘While buyers are always going to try and get a good deal on a property, and who can really blame them for trying, demand is so high that sellers might not feel the need to lower prices in the current market.’
Around one third of sellers say they wouldn’t accept a lower offer on their property
What’s the best way to get a lower offer accepted?
Buying a house can be daunting, whether as a first-time buyer or an experienced mover, especially if you’re not sure of the best way to negotiate on the price.
The property market is bouyant at the moment and estate agents are likely to use this to try to increase the size of your bid.
Remember that your bid should be based on how you value the home and your own finances, not how much interest there is in the property. Ultimately, it’s up to you to decide if a home for sale is at a good price for you – and how much you are willing to pay to secure it.
Nonetheless, not all homes are selling – and many continue to have their asking prices reduced.
Sellers may be more reluctant to take a lower offer at the moment while there are so many house hunters out there, but they will also know that finding a good buyer is not easy.
There are some steps you can take to help your chances of getting a lower offer accepted.
They may not guarantee you will get a property at the bargain price you want, but can help to at least ensure the seller takes your offer seriously.
The first and perhaps most important step is to do your research. You could be missing out on savings if you fail to spot some obvious signs.
Selling your home? Getting the price right doubles your chances
Putting your home up for the right price on the first listing doubles your chances of finding a buyer, an extensive new study has found.
Analysis from Rightmove found that just one third of sellers who listed a property for sale but then had to reduce the asking price found a buyer.
However, two thirds of those who didn’t have to reduce their asking price found a buyer.
Rightmove’s Tim Bannister said: ‘If sellers are serious about selling, then starting with too high an asking price can cause unnecessary delays, and also make it a lot less likely they will actually find a buyer in the end.’
For example, before you put in your offer, it’s a good idea to check how long the house has been on the market – if it’s been up for sale for a while, it could suggest the property is overpriced.
Similarly, if the asking price has dropped since it has been on the market it could indicate the house is struggling to sell and the owner is keen to get moving.
Property listing sites Rightmove and Zoopla’s standard listings show you how long a property has been on the market and if it has been reduced, but not by how much.
You can download a Chrome internet browser add-on called Property Tracker that tracks prices on Rightmove and shows you reductions (and increases) in price.
Look at what else is on the market and what other buyers will be considering and check for listings sold subject to contract. See if you can get agents to tell you how much homes nearby or similar sold for.
Check Rightmove Sold Prices or Zoopla’s house price section for previously sold prices to get a feel of the market. Beware that all homes are different though and comparing like with like is hard.
Be nice to the estate agent
Estate agents act for the seller and buyers should never forget that. Their job is to get a property sold for the best price and some can be more crafty than others to get that price up.
That said, getting an estate agent on your side is one of the keys to getting a good offer accepted. Don’t just hide behind property portals and emails, speak to them on the phone, chat to them at viewings and buid a rapport.
Make it clear to them that you are a good prospect as a buyer. Have a mortgage decision in principle to hand that shows how much a lender would be willing to offer you and that you are ready to act fast on lining up finance. Get proof of your deposit and if you have a sale agreed on your current property, make sure they know that.
Don’t mess about making your offer with the agent. Lay it all out, offer to provide evidence to back up your finances and position and explain why you want the house. The more you can sell yourself to the seller, the better the chance of having an offer accepted.
You should also find out if the property is being marketed by more than one estate agency. If so, the agent you’re viewing through may encourage the seller to accept a lower offer, so as to secure the commission ahead of the other agent
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How to negotiate
The next step is to plan out your negotiating tactics. Do you put in a high offer first in order to secure a deal fast, or start with a low offer and try to save some money at the risk of somebody else beating you to the property?
Remember you can always negotiate up, but you can’t negotiate down.
Don’t worry too much about upsetting sellers with a low offer, but test the waters with the estate agent first. They will probably say the seller won’t accept it, but you should be able to work out if it would prove so offensive that the seller would bar you from ever offering more (this is highly unlikely to happen).
If you do go for a lower bid, buying agent Henry Pryor says it helps your chances if you can prove to the buyer that you’re able to follow through on your offer.
He said: ‘You’d be amazed how many people go house-hunting without the ability to buy something.
Buying agent Henry Pryor gives his tips
‘If you’re expecting to make what might be seen to be a disappointing or possibly even a derisory offer it’s vital that you make up for it by at least looking like you could deliver on it.
‘Make sure you have a solicitor who will act for you. They will need to check your circumstances before agreeing to act on your behalf, something that can take time.
‘Get your deposit together so that you can show a screen grab of the money in a bank account.
‘Then, get confirmation that you can get a mortgage either with an “agreement in principle” or confirmation from your mortgage broker that you are good for the money. If you plan to have a building survey done, then find a surveyor who will do it.
‘The owner needs a reason they should consider accepting less than they had hoped for and the agent wants to be confident that if they agree a deal with you the deal is likely to go through.’
If you’re flexible on the completion date it may also boost your chances of having a lower offer accepted.