Know the market
Before you put in an offer, spend time researching the property and local area. Be aware of how much similar properties are selling for (look for characteristics such as number of bedrooms, age, garden size, and position) and how fast they are selling. If homes have been on the market for a while and are selling for below asking price, you’ll be in a much better negotiating position than if buyers are snapping up properties days after they appear online. Consider whether the property has any unique or rare features that might increase its appeal. If it has an unusual loft conversion or is the only home on the street with a garage demand may be high, and you’ll need to move fast to secure an offer. Don’t forget to look at factors that might impact the property’s long-term value, such as:
- Is it in a flood zone or at risk of other environmental factors, such as cliff erosion?
- Will it be negatively affected by planning applications in the area? If it currently has a view, would this be at risk from future development?
- Is it in a desirable school district?
- Are local crime rates increasing or decreasing?
Talk to the estate agent
Ask a lot of questions about the seller – how long have they lived in the property? Why are they moving? Are they in a chain? How long has the property been on the market? What exactly is included in the sale? The information that you get will tell you a lot about whether the seller might be looking for a quick sale and willing to accept an offer or whether they are prepared to hold out for the desired asking price. Remember that the estate agent works for the seller, so be cautious about appearing too keen and don’t disclose too much information about your finances. Do tell the agent anything that may improve your position from the vendor’s standpoint, for example if you’re a first-time buyer with no chain, have a pre-approved mortgage and deposit ready, already have your property on the market, or are able to commit to a moving date. The agent will pass this information on to the seller, which will put you in a favourable position when you make an offer.
Careful research and a conversation with the seller’s estate agent should help you decide your initial offer. The agent will usually give you an indication of how close to the asking price the seller will be willing to accept. Set yourself an upper limit of how much you’re willing to pay before you begin negotiating. Consider:
- Making your offer contingent on the seller taking the property off the market to reduce the chances of being gazumped (when the vendor accepts an offer and then backs out in favour of a higher bid).
- Offering a small deposit as a goodwill gesture to help secure the sale.
- Having all your paperwork in place (including a mortgage in principle from the lender) so the vendor knows you can follow through with your offer.
Whether you are buying or selling a property, Lillicrap Chilcott offers expert advice and professional service. Contact us today for more information.