Negotiating tips

Because property prices are not fixed, there is likely to be some degree of negotiation over the final sales price of a property. The buyer is likely to be negotiating on behalf of him or herself. The seller, however, may be represented by an Estate Agent, who is likely to be well practised in the art of negotiation. Typically, there are four steps in the negotiation process – preparation, opening, bargaining and closing.

The Preparation Phase

Stay well informed about the property market nationally and locally

Being aware of movements in the property market will give a significant advantage. You will already have gained an overview of property prices in the area when you were looking for property initially. You can add to this knowledge by searching the price paid data of similar properties in the area, made available by Land Registry. www.mouseprice.com also provides this information.

Know what is included in the package

When deciding how much you are willing to pay for a property make sure you are aware of the entire package. The value of a property will change depending on what is included- for instance, it could be that the seller is offering to include the carpets, dishwasher and washing machine. It is also important to remember these specifics when looking at comparables.

The Opening Phase

Present your starting position, and find out the starting position of the other party

It is likely that the seller has already stated their starting position in the form of an asking price, unless a higher offer has already been put in, or some negotiations have already taken place.

Make sure both parties agree on what is included in the package

State what you expect the property to include. The title deeds will show what land is included with the property. However, the seller may also be offering extras such as light fittings or carpets as part of the property. Agreeing on what is to be included in the sale will save confusion later when a price is agreed.

Take the opportunity to assess the other party

Try and gain and insight into the position of the person you are negotiating with, as this may give you a competitive advantage. For instance, if you are the buyer and you know that the seller wants a quick sale they may be persuaded to compromise on price in return for a fast deal. Vice versa, if you are the seller and you know the buyer has not expressed any interest in any other properties, you may achieve a more profitable sale.

The Bargaining Phase

The aim of the bargaining phase is to reach a compromise. If you can support your argument with logical reasoning you will be in a better position- for example, the buyer could refer to the valuation report by the chartered surveyor in order to get price reduction because the roof needs re-insulating.

General Bargaining Tips

  • Discuss rather than demand.
  • Don’t look desperate. If the seller thinks you need the property, they are at a considerable advantage.
  • Stay professional and remain calm– don’t get emotional or act too keen
  • Evaluate the situation and act accordingly. It would be wise to weigh up each eventuality before the negotiations begin.
  • Be polite, not confrontational – be polite, no matter how aggravating you find the seller as a person and business partner. A seller will feel more comfortable handing over the house to someone they get on well with.
  • Negotiate face-to-face, not over the phone. That makes a better impression and gives you the opportunity to interpret the seller’s reactions
  • Act Sensibly- there are no hard and fast rules.

The Closing Phase

At this point both parties should agree on the price, and what the property includes. It is wise to then have the contracts drawn up as soon as possible.