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.
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.
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.
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.
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.
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 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.
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.