Posted: September 2014
By Jo Eccles
No one likes overpaying for anything, and property is no different; when negotiating on a property most people want to get a good deal. A large proportion of my job is negotiating prices, furniture items, time scales, and so on. And, whilst it’s always great to agree a discounted price or very favourable purchase terms, it must be remembered that this comes with risks.
If a seller has been backed into a corner and agreed a price or terms they’re not happy with, in many cases, the purchase process will start progressing but the seller is unlikely to remain loyal to the buyer. This means that they will, nine times out of 10, instruct the estate agent to keep showing the property in the hope of receiving a better offer before the original buyer exchanges contracts.
If you’re the original buyer and you can get to exchange at the favourable terms then great, but a lot of the time you will either be knocked out of the way by another buyer who is prepared to pay a slightly higher price, or the seller will have second thoughts and refuse to exchange. If this happens, you lose the legal, survey and mortgage fees you’ve already incurred.
In my experience, it’s often much more successful to agree a price which looks good value for money, but doesn’t leave the seller feeling cheated. That way, the buyer still gets a good deal and it’s more likely that the sale will actually go through to exchange of contracts. In one example, we agreed a purchase for a client where our bid was £10,000 lower than what the seller was prepared to accept. The seller offered to meet us in the middle but our client wanted to hold firm at the lower offer. On pointing out that the seller would most likely continue marketing the property and jump ship to another buyer at any opportunity, our buyer agreed that paying the extra £5,000 was worth it to ensure that the purchase went through.
If you have a question you’d like Jo to answer please email firstname.lastname@example.org or tweet her @joeccles.