Five tricks for first-time buyers to haggle a house price discount – and you could save up to £28k
HOMEBUYERS can haggle discounts worth tens of thousands of pounds off asking prices using a few trusty negotiating tricks.
Four in ten sellers knocked down the price of their home in June by more than 5% as the market has switched in favour of buyers, according to data from property site Zoopla.
Typical house prices now sit at £286,532, according to the latest data from lender Halifax.
A 5% discount, therefore, equates to a chunky £14,326.
Zoopla said 15% of sellers have accepted discounts of more than 10% which works out as at least £28,653.
Rising mortgage rates mean banks will often lend less money, making it harder to get on the property ladder.
So it’s all the more important in the current climate that buyers get a discount where they can to land their dream home.
Zoopla said higher mortgage costs with average rates at 6% hits buying power by as much as 20% – this means the price you can afford to pay with a mortgage dramatically drops as rates edge up.
But the average discount secured by home hunters currently only sits at 3.8%.
Here the experts reveal how buyers can knock down house prices…
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 fulfil the offer you want to make.
Rhys Schofield, director at Peak Mortgages and Protection, said: “Get your ducks in a row.
“Speak to a broker who’ll get your agreement in principle ready, showing that you can get a mortgage.
“Have your ID and proof of deposit ready as estate agents need to verify this and have your solicitors ready to go.”
Flaunt your position
In some ways, first-time buyers are in a stronger position than rival bidders because they’re not in a chain.
Waiting for someone else to buy your home before you can transact can be a lengthy game with many hold ups.
So when submitting your offer, be sure to highlight that you don’t have a chain, which should make you more appealing to the seller.
Ranald Mitchell, director at Charwin Private Clients, said: “Property sellers are far more likely to accept lower offers from buyers in the right positions.
“First-time buyers have no dependent chain and should be in a strong position to negotiate a good price.
“Don’t be shy to play the game and put in a lower offer than the asking price – be confident.”
Check out the local market
When deciding what price to offer, get a good understanding of the local market.
Look at similar properties in the area and how much they have sold for. This information is readily available on sites such as Zoopla and Rightmove.
Stuart Collar-Brown, from property site My Auction, said: “A clever way of working out good value is cost per square foot – so you could take the asking price and divide it by the square footage.
“This will give you comparisons of similar houses in the area to argue your case.”
Know your seller
Finding out as much as you can about the seller can give you some vital clues on the kind of offer they might entertain.
Stuart said: “Look at how long the property has been on the market and whether it has been reduced recently.
“Try to find out if the vendor is buying something else or had an offer accepted on something.
“This will help you ascertain how urgently they need to sell to be able to move forward and allows you to work out what a fair offer price would be.
“It’s also worth trying to establish whether the vendor has declined any offers.”
For example, if a seller or their relative has gone into full-time care, they could be more likely to accept a lower offer, because it’ll save them stress and money required on upkeep, according to Stuart.
You could even try to target motivated sellers who will likely be more open to negotiation on price.
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.
Professional landlord and property developer, Kundan Bhaduri at The Kushman Group, said: “Think of it this way – if the seller becomes aware that you have the means to afford a higher amount, they have little incentive to reduce the price.
“You have already given them a bargaining upper hand.
“By maintaining the confidentiality of your budget, you preserve an air of intrigue and flexibility during the negotiation process.”
You can also use flaws in the property to justify going in below the asking price.
Kundan added: ” Identifying what’s wrong with the property gives you real justification for offering a lower price.
“If there are visible issues or necessary repairs, it affects the overall value and desirability of the property.
“Therefore, by pointing out these flaws to the seller and their agent, you’re essentially presenting them with valid reasons why the property should be priced lower than their initial asking price.”
Negotiating on the price isn’t the only way to get a reduction – check out first-time buyer schemes that could be worth as much as 75%.