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Negotiating the Price of a Property

When it comes to putting on offer in on a property, the task of negotiating can be an anxious time. You may be tempted to take exactly what they ask for in order to secure your dream home or worry that you will pay too much. On the other hand you may want to save as much money as you can but worry that a lower offer could mean you are at risk of gazumping by another potential purchaser. It is obviously a daunting time, but the seller is probably as nervous as you when it comes to getting the right price for their home.

Various factors will usually determine how much you can negotiate with the seller. Whether the property has been on the market long, or they are looking to sell quickly. One or both of you may be in a chain which can also impact on the level of negotiation. You will obviously be more likely to get the property at a lower price and at a lower risk of being gazumped if you are in a strong position to move quickly with no chain. This is especially good for first time buyers.

You are likely to have a mortgage in place at this stage or a figure of how much you can afford to spend on a property, and it is important to stick to that price. There are however many extra costs involved with buying a property including legal fees or agent fees, surveys fees and then costs of living once you are in your new home. You therefore need to factor in these costs before setting a top figure, as this may change.

There are different processes of negotiation but the most common one is open negotiation. In most cases it is a good idea to start low – usually up to ten percent below the asking price. Many sellers actually increase the asking price initially to account for this, so don’t feel like you are being cheeky. If more people are bidding on the same property, then the estate agent managing it will usually let you know of any other bids that are higher than yours, allowing you to resubmit a better offer to the seller. The only time you should really consider putting an offer across that is higher than the asking price is if you know someone else has already offered the full amount and you don’t want to risk losing the property.

Try not to appear too enthusiastic about the property, as this is likely to let the agent and seller know that you may be willing to pay much more than you are offering. It could be worth contacting the seller directly but there are pros and cons to this, as it may actually be harder to negotiate. You may find that incentives are offered such as a gifted deposit, white goods or other fixtures and fittings, but think carefully about the value of these before committing to any kind of offer.

by Cormac Henderson

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