Negotiating The House Price
Once you have found the right house, price negotiation is the next step. Starting sale prices for houses are typically set higher than the actual expected sales price, and sellers expect to negotiate with potential buyers. An initial offer is usually somewhere between five and ten percent below the original asking sales price. Your first offer will set the stage for the final sales agreement, so it is essential that you are educated and prepared for this important aspect of househunting.
Research the current local and national housing markets to ensure the seller’s asking price and your intended offer are reasonable compared to recent home sales. Land Registry reports are available online and give information about house sales in specific locations. The asking and sale prices are also reported, and you can get a good idea of what your original offer should be. The general direction for the housing market can be seen by looking for increases or decreases in asking prices over a period of time.
Consider any improvements previously made to the home, as this will usually increase the home’s value. For example, a home with an extension or fitted kitchen will likely result in a higher selling price than a similar house without these upgrades. Location is a critical component of house pricing. A house in a popular, upcoming location will fetch a much more attractive sale price than the same house in a rundown, less desirable area.
Certain fixtures and fittings are sometimes included in the sale price of a home. It is important to have a clear understanding of what comprises the final sales package. Don’t assume a fixture or fitting is included in your purchase price. Ask the seller to provide a list of everything that will be part of the sale of the home.
If other buyers are interested in the house you are considering, negotiations will be more difficult. The seller and agent are not likely to accept an offer that is lower than their anticipated sale price. In this situation, you will be wise to offer the asking price if you are truly interested in buying the house.
Find out how long the house has been on the market. Perhaps the asking price has already been lowered, indicating that the seller is ready to find an interested buyer and is willing to agree on a decreased sale price. Try to determine why the seller is having difficulty selling the house. The house may have been overpriced to begin with, causing prospective buyers to lose interest in buying it. There may, however, be problems with the house that are not evident to you at first.
Expect to pay a higher price for a home during the spring and summer months. This is a popular time of year to make a move, and houses are in more demand during these months. If you are able to wait until the fall or winter to buy a home, you can potentially save yourself quite a bit of money.
The seller will be interested in how soon the sales transaction can be completed. If you are waiting for the sale of your current home in order to be able to buy another home, this could delay the completion of the sale. If a seller needs to sell the home quickly, your offer may not be accepted. However, if the seller is not in a rush to sell the home and no other buyers are interested in the home, the seller may not have a problem waiting until the sale of your present home is complete. If your home has already been sold or if you have no home to sell, you will have a distinct advantage.
Secure a written agreement from your mortgage loan lender stating that you have already been approved for a loan in the amount to cover the purchase of the home you are interested in. Having this step of the process completed before making an initial offer will let the seller know that you are definitely interested in purchasing the house. The completion of the sale can be hastened, benefiting both you and the seller.
During times of falling house prices, the buyer is in an excellent bargaining position. There is usually an abundance of property choices during this type of market, and you can take your time making a decision about a home purchase. Don’t allow the seller or agent to pressure you into closing the deal before you are ready. However, you will need to remember that there are normally many buyers during periods of decreased house prices, and the house you are interested in may be bought by someone else if you wait too long. The seller will be more likely to offer discounts and incentives, such as paying the Stamp Duty or installing new fittings or carpet, as part of the deal.
Negotiations are much more difficult for a buyer during times of increasing house prices. Some buyers will place an offer that is higher than the asking price in order to ensure they win the bidding war. The seller may not consider an offer even slightly lower than the asking price during these times. It is possible, however, that only certain types of property or specific locations are involved in the housing price boom. Keeping your options open instead of looking for only a specific type of home in a particular location will certainly be to your advantage. Determine the maximum amount you are willing to pay for a house before you begin your search, and do not budge from this amount. You will be far better off to wait to find an affordable home than to buy one that will cause financial problems.
After the seller accepts your offer, the offer must also be made in writing. You are not legally committed to buying the house until both you and the seller have signed contracts. There must also be a survey performed on the house. Make sure all the terms and conditions of the sale are included in writing, such as what repairs need to be made and which fixtures and fitting are part of the sale package.
