Buying a new home is a major investment for most of us, and is often the most costly purchase we will make in our lifetimes. Of course, a property purchase is an excellent investment and something that most people are keen to do. However, you need to be able to ensure that you can afford the repayments on the mortgage in order to avoid losing the home, which means finding a property that is within your price range.
What you may find is that you find the perfect new home for your needs but that it is priced slightly out of your budget. However, it is important to remember that when sellers set their asking prices they often take into account the fact that buyers will negotiate in order to get the price down – this is something that most sellers expect. This is why it is important to learn how to negotiate house prices if you are looking to purchase. Learning more about negotiating house prices could save you a fortune when it comes to making your purchase.
I’ve always considered myself something of a haggler – when I go to shops, markets, and even overseas, I like to try and push down the prices on small items that I purchase such as clothes, souvenirs and other items. However, when it came to purchasing my first home – which involved spending tens of thousands of pounds – I simply offered what the seller was asking without even toying with the idea of negotiation. That was the first and last time I made this mistake, and since then I have always made sure that I have my negotiating head on when considering a property purchase. Unfortunately many people make the same mistake that I first did whereby they are easily able to negotiate prices when purchasing smaller, lower value items but fail to do so with really expensive purchases such as a new home.
Some things that you need to bear in mind when it comes to property price negotiation include:
Don’t feel afraid or cheeky about negotiating a house price, as in most cases this is something that the seller will be expecting and will probably have set the asking price accordingly. Of course, you shouldn’t try and make an offer that is clearly insulting because it is way too low but you should certainly start your offer lower than the asking price. One tip is to do your research before you view the property – look at other similar homes in the same area to see what the asking prices or values on those are. Also, make a firm decision before you go with regards to what your starting offer will be.
If you get pre-approved for a mortgage you may find that you have more bartering power. This is because many sellers prefer to sell their house to someone that has already been accepted for a mortgage in principal rather than to someone that has yet to go through the process and may not even get a mortgage at the end of it all. You may therefore find you have more power to negotiate if you already have the wheels in motion with your mortgage.
When it comes to negotiations, it is not just price that you need to take into consideration. You can also find other ways to negotiate – for instance, a friend of mine who wanted to put in an offer for a property said she would make the purchase providing the sellers arranged and paid for a number of repairs that were required beforehand. She therefore saved herself the money and hassle of having to deal with these afterwards. She also went one step further and negotiated the inclusion of some appliances and items of furniture within the price, which she would otherwise have had to pay for herself.
When you are negotiating the price of a house, it is important to leave yourself some leeway so that you can increase your offer should you need to do so. Make sure that you do not offer something that is ridiculously low but that your initial offer is low enough to leave you with plenty of room to increase the offer. This is why it is important to make sure that you take some time to think about what you are going to offer before you actually go out and see the property. That way, you will be fully prepared in the event that you really like the house and want to make an offer to the seller. Also, make sure you take along any copies of mortgage pre-approval from lenders, so that you can prove to the seller that if they are willing to accept your lower offer you are ready to get things moving.