HOMEBUYERS can haggle thousands of pounds worth of discounts off asking prices using a few handy negotiating tricks.
Sellers are accepting reductions of £18,000 on average in order to agree a deal with buyers, according to property website Zoopla.
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The experts revealed that higher mortgage rates and more supply have boosted buyers’ choice and negotiating power.
This has led to a “strong buyers’ market”, with the typical 5.5% discount-to-asking price at a five-year high, Zoopla said.
It found the average discount-to-asking price for sales is 6.1% in London and the South East – equating to £25,000 being shaved off.
This compares with average discounts of 4.8% or £11,000 for the rest of the UK.
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Although potential buyers are still having to deal with significantly higher mortgage rates than before they began to skyrocket.
Richard Donnell, executive director at Zoopla, said: “These are the best conditions for home buyers for some years, with more homes to choose from and with sellers more prepared to negotiate on price to agree a sale.
“There is a growing acceptance that what a home might have been worth a year ago is now largely academic given current market conditions.
“Sellers have plenty of room to negotiate, with average house prices still £41,350 higher than the start of the pandemic.”
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The report added that the UK housing market is on track for one million sales completions in 2023 “but the pipeline of deals as we approach the end of the year is the lowest for four years”.
Typical house prices now sit at £281,974, according to the latest data from lender Halifax.
A 4.8% discount, therefore, equates to a chunky £13,534.75.
So it’s all the more important in the current climate that buyers get a discount where they can to make sure they land their dream home.
We spoke to the experts to find out the best ways you can get a reduction on your first home.
Be prepared to move fast
If you want to put a lower offer in on a house, you need to make it as attractive as possible to a seller.
No one wants a home sale dragging on for months and months, so if you can assure a seller you can move quickly they could be more likely to take up a lower offer.
This means you will need to be sure that you can get a mortgage for the amount needed to fulfill the offer you want to make.
Rhys Schofield, director at Peak Mortgages and Protection, said: “We’d always say be prepared – if you stand out as being really well organised you’re in a stronger position to negotiate and are more likely to win against other potential buyers if the seller and estate agent thinks you are a safer bet to sell to.”
Rhys says the best way to do this is to have your paperwork in order.
He said: “As part of their anti-money laundering obligations the estate agent will need to see your ID, proof of deposit and agreement in principle.
“Have these to hand and you’re in a better position to be cheeky with your offer.”
He also added it’s important to get your mortgage broker to provide an agreement in principle certificate in advance so you’re not hanging around waiting for one.
Don’t reveal your budget
Have in mind your maximum budget but it’s a good idea to keep it to yourself if you can.
Jonathan Rolande, property expert from the National Association of Property Buyers, says this can make a huge difference.
He said: “Never tell the agent or seller your true budget.
“Saying something like ‘I’ll offer £100,000 but can go to £110,000 if need be’ means you’ll pay £110,000!”
Instead, try to put forward a sensible range at the beginning.
Go low at first
Another key tip is to not offer the full asking price from the off.
Rhys said: “Don’t offer the full asking price straight away, 5-10% under as a first offer is generally where we’d go but every property is different.
“We’d normally suggest that if you see a property you like, ask your broker who you should have involved from early in the process as they can dig into the situation for you a bit more and advise.”
He also pointed out that a local broker may already have a good relationship with the agent that can be used to your advantage.
You can also use flaws in the property to justify going below the asking price.
Jonathan said: “If there are faults with the property, get estimates and renegotiate.
“You can usually only do this for things that aren’t obvious, such as roof issues or damp.”
Don’t overlook an auction
Auctions can seem intimidating, especially to first-time buyers but it’s important to not overlook them.
Stuart Collar-Brown, from property site My Auction, said: “Many people are frightened of auctions but they genuinely shouldn’t be – so long as you have done your research it can be the best way of securing a great deal.”
He said the best way to do that is to make sure you read the legal pack or take advice from a solicitor.
He also added that you should make sure you speak with the auctioneer about any fees involved as well as the process.
Stuart said: “And make sure you have your finances in place prior to bidding, then you stand a good chance of bagging a bargain – so long as you stick to your maximum limit and don’t get over-excited!”
Check out older properties
When you’re having a look for your new home you might be tempted to toggle your search to the fresh entries.
But that might not be the best decision and you could have a better chance of haggling down a deal if you look for properties that have been up for longer.
Stuart said: “When searching the area you would like to buy in (either postcode plus radius or specific town/city) – prioritise listings from oldest to newest on the search engine you are using.
“This will show how long properties have been on the market and you may be able to negotiate a better deal for a property that has been on for 3+ months than something that has been on for 3+ weeks.”
Another key tip is to see if the older properties have been reduced and look at when the reduction happened.
He added: “Again, if a property has been reduced 3+ months ago and not again, it’s unlikely the client can afford to drop down below the existing price but for something that has been reduced in the past 7-10 days, they are likely more susceptible to a lower offer because the decision is fresh in their mind and the urgency to sell has likely gone up.”
Meanwhile, first-time buyers will get more help to get on the property ladder, the Chancellor has confirmed.
Plus, here are little-known first-time buyer schemes to get help onto the property ladder from your family
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