Knowing what is going on in the housing market can often be difficult. Of course, we know that prices have been rising over the past few months but there have been talks that prices may go back down due to the uncertainty surrounding the elections and the economy.
Regardless of what the situation is, your focus when buying a home should be to make sure you are getting the best deal possible. You need to seek out value. More than 70% of homes are sold below the asking price, which means you have a good opportunity to knock off tens of thousands of pounds from the price of the house you want, especially if you know how to deal with agents.
Some important points to keep in mind:
The agent is working for the seller not you:
This is key! Although the best agents know how to balance the priorities of the seller and buyer, as property expert John Matthews of Kings Estate Agents in the UK affirms, “generally the focus of the agent is to get good returns for the seller regardless of the costs to the buyer. Their commission is probably based on the final sale price so they are directly incentivised to keep the price high.”
The agent will use persuasive techniques to make sure you are only seeing the positives of the house while glossing over the negative points. Make sure you are aware of these tactics and place emphasis on getting the home for the best possible price from your very first interaction with the agent.
Shave off 10 to 20% from the amount you really intend to pay for a home:
If you have a firm budget in mind, remove 20% from that amount when giving a quote to the agent. This will give you a good foothold during negotiations. Chances are you will be shown houses that are either overpriced or surpass your budget. The key is to stick to your guns on your criteria, the quality of the home and your budget.
Avoid showing desperation:
When agents sense desperation, the buyer is immediately at a disadvantage during negotiations. All they need to know is that you have the funds ready and would be happy for an early close but you are not willing to compromise on your budget. During the viewing, don’t appear overly keen and avoid discussing things such as where the furniture will be placed, colour of curtains etc. Focus on asking questions that will help with negotiations, like why is the property on the market? How many people have come back for a second viewing? Etc. Also let the agent know you are looking at other properties and will be in touch when you have made a decision.
By following these simple tips, you will be in a good position to get a better deal on your home instead of paying more than you have to.