How to negotiate house prices: buyers getting 5-10% reductions
Buyers are successfully renegotiating asking prices in the current market, with four in ten achieving price reductions and a fifth securing 5% off. Here’s how to negotiate effectively when buying a home and what sellers need to know about pricing strategy.
Current market conditions favour buyers
According to The Property DriveBuy, who looked at current housing data, 14.8% of sellers in the last month have reduced their asking price in order to attract more buyers. This represents a significant opportunity for purchasers, particularly first-time buyers who may be struggling to save deposits while house prices remain high.
Their assessment shows that certain locations have seen particularly large numbers of homes being renegotiated down to more attractive prices:
- Sheffield: 50% of listings reduced
- Brighton: 44% of listings reduced
- Cardiff: 35.7% of listings reduced
- Leicester: 28.6% of listings reduced
- Manchester: 21.8% of listings reduced
Part of the issue for sellers is that buyers have become more cautious, leading to stagnation in the housing market. The housing market is one of the indicators of the strength of the broader economy and, until things are felt to be improving, this caution is likely to continue.
How buyers are successfully negotiating price reductions
According to research published by the HomeOwners Alliance (HOA) at the beginning of November, four in ten buyers have successfully renegotiated the asking price on the home they want to buy. A fifth of those assessed managed to achieve a 5% reduction in the asking price.
On the other side of the equation, 39% of buyers paid the full asking price and 10% paid more after a period of competition with other prospective buyers.
Expert advice on negotiating house prices
Commenting on the results of the analysis, Paula Higgins, CEO of HOA, said:
“Buyers clearly have more room to negotiate right now — but don’t just guesstimate your offer.
“Do your homework: use an online valuation tool that estimates how much the property is worth, as well as researching what similar homes have actually sold for in the area.
“Knowing your stuff gives you confidence to negotiate effectively and fairly.”
For buyers: how to make a successful lower offer
When you pitch your opening offer, it’s fine to come in under the asking price if you think that the property and what you’ve seen of it warrants the reduction in price. However, beware of putting in an offer that is ridiculously low in the hope that you might convince the seller to accept it for a quick sale – you won’t be seen as a committed buyer.
Tips for negotiating effectively:
- Research what similar properties have sold for (not just asking prices)
- Use online valuation tools to understand true market value
- Look at how long the property has been on the market
- Consider getting a survey to identify any issues that justify a lower offer
- Be prepared to move quickly if your offer is accepted
For first-time buyers particularly, the process can seem daunting, especially since you don’t have the advantage of having gone through it before. The problem is deepened by the relative difficulty of saving for that deposit, but current market conditions offer genuine opportunities to negotiate.
For sellers: pricing strategy matters
Paula Higgins also advised sellers:
“Setting the right asking price is key to attracting serious buyers quickly and avoiding painful price cuts later. Be guided by local sale prices, market trends and how fast you need to move.
“While it’s tempting to start high and ‘see what happens’, homes priced realistically from the start sell faster and more successfully.”
From a selling point of view, HOA underlined with their findings the Zoopla data that shows homes where the price has had to be reduced to achieve a sale take an average 2.4 times longer to sell.
So, for sellers, make sure that you agree an asking price with the estate agents that will achieve a quicker sale, but avoid underselling the property too. There is help out there, so taking some time to research the options can be of significant value (and lower stress) when it comes to entering the housing market.
Getting conveyancing sorted after your offer is accepted
Buying a new home can be an exciting process, but it is often tempered with frustration at how long things are taking. Not only are you thrust into a process where you are reliant on a number of other people over whom you have little or no control, but you have to carve your way through the volatility of the housing market.
At Best Value Conveyancing, we appreciate that your funds are probably quite limited, especially if you are looking to buy that first home. You’ll want to employ legal services that are great value for money without losing anything in the quality of the service provided.
We provide quality conveyancing at competitive rates with fixed-price quotes and no completion, no fee guarantee. If your sale or purchase falls through, even if you are gazumped, you pay nothing.
Ready to move forward with your purchase? Call 0800 0387 007 or get a quick quote online.
