House hunting can be a minefield if you have aspirations to purchase the perfect home, especially if you’re trying to combine the ideal location, design and price. While you can sometimes negotiate on the first two factors, being constrained by your budget can mean the property that you fall in love with is simply beyond your means, with no easy solution available. Should you, however, only view properties below your upper price limit, or is it worth investigating whether the perfect home that happens to be slightly beyond your reach can be secured at a more affordable price? Even if you’re well within your budget, being able to knock down the price is clearly a satisfactory outcome given that you’ll be repaying your mortgage for a substantial part of your working life.
Knowing how to pitch your offer can be a challenge though. Putting in a high offer to secure the sale could mean paying over the odds, especially if the property has been marketed at an above average price. However, placing a low bid risks it being rejected and another interested party being offered the opportunity to sneak in with a more attractive offer in the meantime.
While making an offer on a property is an inexact science, there are some steps you can take to help achieve the best possible price for your dream home.
Before you offer
While estate agents will always ask how much you are able to spend on a property, they will usually introduce you to homes that are higher than your stated maximum. Therefore, it can be worth being less than honest about how far you can stretch your finances, as you will almost certainly have access to the more expensive homes anyway and you’ll avoid giving the agent the impression that the sky’s the limit. Remember that the estate agent acts on behalf of the seller; any sensible seller will always ask their agent how much a prospective buyer can afford to pay.
When viewing a property, don’t put on an over-the-top show of enthusiasm. The property owner will be hoping for the highest possible price and, sensing that you’ve stumbled upon the home of your dreams, may be tempted to push you to the limit when it comes to deciding whether to accept your offer.
Making an offer on a property
Always find out from the estate agent if there are any other potential buyers who are expected to place an offer on the property. If this is the case, and the local property market is buoyant, you may have to pitch your first offer closer to the asking price.
Starting low, however, can be a good tactic, as you may have seen on property TV shows such as Location, Location, Location. Your offer can always be rejected and you can aim to negotiate an improved bid if there are no other interested parties. If there are any known problems with the property, such as a central heating system that is in need of replacement, mentioning this at the time can help to justify your offer.
Most sellers expect the asking price to be knocked down a little – after all, it is not necessarily representative of the true value of the property. If you’ve been able to find out the reason for the homeowners’ decision to sell, this can also help you to predict if a lower offer will be more likely to be accepted.
Above all, remain calm and respectful. The estate agent will be keen to secure a deal so will act with both parties’ interests in mind, rather than risking losing the sale.
The key to a successful offer is to ensure you are fully informed about the circumstances surrounding the sale. By asking the right questions and holding your nerve, you could be in for a bargain of which you’ll be grateful for years.