Regardless of which category you fall into, the market has never been so complex. Finding a way through the buying process and working out where to pitch your offer can be a challenging, confusing business whether you’ve bought before or not. Here’s our advice when it comes to the tricky subject of price.
First Time Buyers
If you are buying a flat for the first time, make sure your bid is well-presented and you highlight your position. A couple of ways you can do this is by showing proof of your deposit, and it is always a good idea to get a mortgage decision ‘in principle’ and be prepared to provide proof of this, too. Seasoned agents will be able to tell you of all the buyers over the years who’ve said they have everything in order to facilitate a speedy exchange, only to discover that this is not the case. Showing evidence of this could tip the balance in your favour.
In terms of where you should pitch your offer, it is really important to consider the value, not the guide price. Most vendors think their house is worth at least 10 per cent more than it actually is, so if the flat is priced at £300,000 and you think the flat is only worth £280,000, tell the agent and ask them for comparable evidence. Once you’ve got this information, pitch your offer as low as you dare. There is no perfect formula for this process, but being well informed about the local market and listening to guidance from a trusted agent is essential.
Upsizers/ Family Buyers
There is often more competition for family houses; places with convenient commutes and school runs often result in concentrated areas with surprising prices. If you are buying one of these family houses in a ‘prime’ area, be prepared to try and buy something out of the market. If you like the house and you think it’s reasonably priced, ask if the vendor would consider taking the house off the market for a five per cent premium. As with first time buyers, a good buying position, well evidenced, has the power to swing it.
Wealthy PCL Buyers
The current market has an oversupply of unrealistically priced properties with stubborn vendors. For instance, we’re looking at a property privately where the vendor wants £19m plus, and there is no market evidence to suggest that it is worth more than £16m. How do you get the negotiation right in these circumstances?
Most vendors think their house is worth at least 10 per cent more than it actually is
It is often a case of not entering into any dialogue at all at this stage, and waiting to see if the vendor’s expectations fall in line with the market. If they don’t, you would be well advised to just move on.
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