How to negotiate property price when selling your home?
In England and Wales, negotiating property price when selling your home involves a strategic interplay of various factors. Whether you’re dealing with a cash buyer, a first-time buyer looking to get a mortgage, or someone ready to make an offer on their dream home, the art of negotiation remains vital.
As a seller, you should be prepared for buyers to haggle and potentially put in an offer lower than your asking price. It's essential to approach these negotiations with flexibility and an understanding of housing market dynamics.
Engage in open communication with potential buyers, asking them to explain their rationale for any lower offers. This dialogue can reveal opportunities for compromise and bridge the gap between your expectations and buyer’s budget, ultimately completing a successful sale while ensuring both parties are satisfied with the negotiated house price.
When selling your home, understanding how to negotiate property price is vital to achieve the best outcome on the open market. Want to know more? Read below.
What is negotiating property price when selling your home?
Negotiating property price, is where the aspirations of both prospective buyers and the interests of a home seller intersect. It is usually carried out by either parties' estate agent or solicitor, with the primary objective of forging a mutually acceptable agreement.
The negotiations are often multifaceted and provide a situation for sellers to engage with potential buyers in a structured conversion. Within this exchange, both parties can navigate their concerns within the property transaction.
Sellers can assert the value of the property during a negotiation by presenting a compelling case for the property’s worth, sellers aim to convince buyers of the fairness of their asking price.
Buyers often have concerns, whether related to a property's condition, its survey outcomes or their own financial constraints. Negotiations serve as a channel for sellers to actively listen to and emphasise these concerns. In response, they can offer solutions that bridge the gap between their expectations and the buyer’s reservations.
How to negotiate property price for first time buyers?
As a first-time seller, you may wonder how to you can negotiate property price effectively to secure a fair deal in the competitive housing market. For those new to the seller’s role, the process of selling a home can be both exhilarating and exhausting.
While your aim is to secure a deal that reflects the true market value of your property, it’s equally vital that fairness underpins the negotiate house sale process.
For more first-house seller information please see our similar articles below:
What is a cheeky offer on a house?
A lowball offer, often cheekily presented by prospective buyers is generally a significant deviation from the seller’s asking price. Usually, a lowball offer is around 30% or more below the set asking price.
For example, if you’ve listed your property at £250,000 and a potential buyer submits an offer of £175,000, you’re dealing with what’s commonly known as a cheeky offer.
As a seller, you hold the right to respond to such offers in a manner that aligns with your own expectations or property’s market value. You’re under no obligation to entertain offers that fall significantly short of your asking price.
While an outright rejection of such offers is within your rights, there may be a couple of situations where a more nuanced approach is needed:
If you sense that your property may not attract a lot of alternative offers in the current housing market, it might be worthwhile to explore a counteroffer rather than immediately dismissing the bid.
It may be valuable to engage in a conversation with the buyers. You should inquire about their reasons for the lowball offer and whether there are specific aspects of the property they find challenging or unappealing. This dialogue can generate insights that may guide your decision-making process.
Dealing with lowball offers is a balancing act, while you have the right to protect your property’s value and interests, the decision to counter or reject should take into account your current situation, any market conditions and your desire to get a quick sale.
How to get the highest house price?
If you want to get the highest price for your house, it extends further than just negotiating and counteroffers. When you put your house on the market, you will need to ensure that it is staged ready for potential buyers to imagine themselves in your space.
You can stage a property for photograph or house viewing purposes, but generally revolves around de-cluttering the property, adding a fresh lick of paint, making any obvious repairs and making sure the bathrooms and kitchens are stylish.
Obviously, you need to be careful that you don’t spend too much money renovating your house as it may not be reflected directly in your house sale price or negotiate house sale process. Furthermore, you also need to avoid overpricing your property, as this may result in your property not being taken up by potential buyers.
Estate agents will be able to guide you through the house buying negotiation process, as their service centres around teaching homeowners how negotiating property price is key, and leverage how to get the best return on investment.
What is a counter offer when selling a house?
When selling your home, you may be wondering 'how to negotiate house price when selling', well, the process goes like this: You will agree to an asking price with your estate agent, and this serves as an overture. Any prospective buyer will be looking to find the best possible deal, while considering their own aspirations and budget constraints, and so will probably make a counteroffer.
As a homeseller, the asking price should reflect the property's true market value and not be too swayed by your own emotional investments you have placed within the home.
When presented with a buyer’s offer, you, as the seller have three options:
You can choose to accept the buyer’s offer, which will signal the end of the negotiation process. You will form an agreement where both parties find common ground on the terms presented.
Alternatively, you may decide to decline the buyer’s offer outright, indicating a misalignment between their offer and your expectations.
A third choice is to counter the buyer’s offer. In this act, you showcase your flexibility and willingness to engage in compromise. By adjusting your original asking price or terms halfway or partially in response to the buyer’s offer, you could meet a best of both worlds agreement.
Buyers frequently research how to negotiate property price to ensure they get the best value for their investment when purchasing a new property.
It is essential to recognise that most potential buyers are on a quest to secure the best possible deal. Their offer may not necessarily reflect the emotional or financial investments you’ve poured into your property. Instead they seek value, often aiming to strike a balance between their budgetary constraints and their vision of a new home.
How to reject offers on your property
When faced with a potential buyer’s offer that doesn’t align with your own expectations, you should be aware of your options. Rejecting an offer is a legitimate course of action, but it should be carried out with professionalism and courtesy.
If you find yourself unable to accept a buyer’s offer, you should convey your response in a timely and considerate manner. Leaving a potential buyer in the dark, or ‘ghosting’ them, is widely regarded as unprofessional and can have consequences, potentially damaging your reputation with their estate agents.
Promptness in your response is key. Acknowledge the offer swiftly, even if it’s to inform the buyer that you need more time to consider it. Timeliness demonstrates respect for the buyer’s time and interest in your property.
You should approach communication with a positive and polite tone, regardless of your decision, treating buyers with respect is not only ethical but also reflects well on you as a seller.
While rejection is a common avenue, it's advisable to provide a brief explanation for declining the offer. However, avoid divulging too many personal or sensitive details. A simple and professional explanation can suffice.
Rejection often doesn’t mean the end of a discussion between buyers and sellers, occasionally they lead to further, better offers. When selling a property, understanding how to negotiate property price even after you’ve rejected an offer could lead to a very profitable sale.
How to counter offer when selling a house
Usually your estate agent will guide you through this process as they have plenty of experience with counteroffers and can deftly navigate them on your behalf. However, if you find yourself doing the grunt work, or choose the DIY route, the process of counter offering can be a straightforward and empowering process.
If your initial asking price was £250,000, yet a prospective buyer presents an offer of £230,000, anchored in the belief that minor repairs need attention and they would need to invest funds to rectify these repairs, then you have the opportunity to counteroffer.
You could counteroffer with £240,000 coupled with a commitment to address the minor repairs cited by the buyer. This gesture showcases your readiness to find common ground, and it fosters an atmosphere of trust and cooperation.
Buyers are more likely to view you as a trustworthy seller who is willing to accommodate their concerns, thus speeding up the house buying negotiation and house sale process. You should ensure that your counteroffer is not only reasonable to the buyer's request, but is also substantiated by the value of your property.
What is the difference between a counter offer and a negotiation?
A house buying negotiation is the overarching process of discussing and coming to an agreement on various aspects of a house sale. It involves a series of communications and discussions between the seller and buyer, often facilitated by an estate agent or solicitor.
A counteroffer is a specific response to an initial offer made by the potential buyer. When a seller receives an offer from a prospective buyer, they may choose to respond with a counteroffer if the terms of the initial offer does not meet their expectations.
Successfully learning how to negotiate property price can lead to a win-win situation, where both buyers and sellers are satisfied with the final agreement of a deal.
How do you negotiate a good price when selling a house?
If you are selling your house on the open market with the assistance of an estate agent, they will most likely handle the house buying negotiation part of the house selling process. But, if you are left to do the grunt work, then here are a few steps you can take to increase your house buying negotiation skills:
1. Determine your property’s market value
When it comes to selling your house, the first step is to assess its market value. You may have already obtained a valuation, but it’s wise to seek a second opinion, which can serve as valuable evidence during negotiations. To help with this, you could consider the following options:
Leverage your estate agents expertise:
Your estate agent is a valuable resource in determining your property’s value. They possess a deep understanding of the local housing market and recent sale prices. Ask them to provide you with details of comparable properties that have recently sold in your area.
Utilise HM Land Registry data:
Another tool at your disposal is the HM Land Registry, which can provide you with a basic valuation of your home based on past property transaction data.
Consider a surveyor:
If you’re uncertain about your estate agent’s valuation or desire an independent assessment, hiring a RICS surveyor is an option. While it may cost you around £320, it could be instrumental when countering a buyer’s offer.
2. Assess the buyer’s position
Understanding the buyer’s situation is crucial for a smooth transaction. Your estate agent should ask the following questions:
Are they a first time buyer?
How much experience do they have with buying a house?
How much experience do they have with house buying negotiations?
Are they part of a property chain or chain-free?
Are they buying with cash or seeking a mortgage?
How far along are they in their mortgage application process?
Do they already have a conveyancer in place?
A well prepared buyer is more likely to facilitate a swift and trouble-free sale. Be aware that a lengthy property chain can add complexity to the transaction. Also start the process of comparing conveyancers early to speed up the process.
In a seller’s market, mastering how to negotiate property price becomes even more vital, as competition among buyers can drive up prices significantly.
3. Seek feedback from your estate agent
Rely on your estate agent’s expertise to guide your decision-making process. They can provide valuable advice and assess whether the offer presented by the buyer is reasonable. They should also have the local knowledge required to compare the offer to similar properties in the area.
Additionally, your estate agent can inform you if other potential buyers are showing interest, helping you decide whether to accept the offer or wait.
4. Prepare for low ball offers
While it's possible for prospective buyers to present lowball offers, it’s important to remember that such offers don’t necessarily reflect the true value of your property or signal an error in your initial asking price.
If you’ve diligently conducted your research and are confident in your pricing strategy, remain steadfast in your belief and be patient in your pursuit of a fair and equitable price.
5. Consider a sealed bid
If your property generates a lot of interest, you might opt for a sealed bid process. This approach resembles an auction, where interested parties submit a single, sealed offer. You can then choose to accept or reject these offers.
Keep in mind that buyers typically submit their highest possible bid, but your decision may be influenced by other factors beyond the offer amount.
6. Offer to handle repairs
If the buyer identifies repair issues that affect their offer, you should consider offering to address these concerns yourself. By taking responsibility for the repairs, you incentivise the buyer to negotiate more favourably.
You should be careful that these repairs are not extensive as this could lessen your total return on investment.
Furthermore, if you wish to sweeten the deal and potentially encourage a higher offer, you could consider throwing in extras that appeal to the buyer. For example, if the buyer expresses interest in specific furniture or fixtures, you could offer these as part of the transaction
How much can you haggle on house price?
So far in this article, how to negotiate property price, how to reject an offer, how to counteroffer and the etiquette when dealing with low ball offers. But one thing that might be on your mind, is how much can you actually haggle on a counter offer?
While it's recommended that genuine buyers only offer you 5% to 10% lower than the asking price, this can still be quite a lot, especially when you take into account your solicitor fees and estate agent commission (of up to 3%+VAT).
But, luckily for you, there are alternative ways to get great prices for your property without all the fees…like selling to us! We are a UK leading cash buyer, who have over 50 years of experience in the house selling industry.
We can sell your house in as little as seven days, and we will cover all your legal and survey fees. We don’t even work on a commission or fixed fee service, meaning you can walk away from the property transaction with a guaranteed amount of funds.
Want to get the ball rolling?