Phil Spencer: How to haggle down the price of your dream home like I do

In his new Money Coach column, TV property expert Phil Spencer delves into the key challenges that buyers and sellers face in the housing market. This week, he takes a look at how you can secure the lowest price possible for your dream home. Some people love the cut and thrust of negotiating. Others find it awkward, stressful and just want to get it over with. However you feel about haggling, it’s an essential part of buying a home. And it’s always worth trying! Do it well and you could save thousands of pounds, which you can put towards the cost of moving or doing up your new home. I haggle for a living; here are my tips for getting the home you want at the price that’s right for you. Playing a strong hand well The first thing to remember is that the asking price is just that – it’s what the seller (and the estate agent, who, don’t forget, is working for the seller) is asking for. In the current market, sellers rarely get what they want. The estate agents’ body Propertymark says 84 per cent of homes now sell below the original asking price. Some of these reductions are made by sellers who need to attract buyers, others at the behest of buyers who negotiate well. Either way, the odds are stacked in favour of buyers by the glut of homes for sale. The property portal Zoopla says there are currently 15 per cent more homes on the market than there were a year ago. It’s a buyer’s market, which means sellers are often willing to negotiate. But it doesn’t mean you can pluck a figure out of the air and expect the seller to knock it off the price. Prep like a pro You as the buyer need to do your homework to get a handle on how realistic the asking price is and to figure out the seller’s motivation. Understanding these two things will help you make an offer the seller is likely to accept, or persuade them to choose you over a rival buyer. Start by playing detective. Property portals will show the prices advertised for similar properties nearby, but to get a fix on the value of the specific home you’re interested in, consider other factors like the school catchment area it’s in, what the local crime rate is like and what its running costs and broadband speed are. To get granular, you can use a Move iQ Property Report to understand both the property and its surrounding area, allowing you to calibrate your offer accurately. When you speak to the estate agent, try to tease out of them the seller’s reasons for selling and ask how long the property has been on the market. Two key tell-tales to look out for are any signs the seller is in a hurry or if they have been struggling to get serious offers. For example, if the sellers have split up, or one has landed a plum job elsewhere, there’s a good chance they will be willing to do a deal in order to move quickly. Agents have to tell you if other offers have been made, albeit not the amount, but it is worth asking for the numbers just in case. If offers have been rejected, try to find out why. And if no offers have been made, especially for a while, you may have more leverage if the buyer is getting anxious. Make yourself proceedable Landing your dream home at the best price isn’t just about how much money you offer. It’s about making yourself the most attractive buyer too. 40 per cent of estate agents say it takes at least 17 weeks between an offer being accepted and a sale completing. Throughout that time, the seller will be worried the deal might fall through. This makes certainty a valuable currency. I can’t tell you how often I’ve seen sellers reject an offer made at, or even above, asking price because the buyer wasn’t ready to sell their own home. Buyers who get all their financial ducks in a row before making an offer are much more likely to succeed, even if the figure they offer is lower. The trick is to be what estate agents call “proceedable”. The most proceedable buyer of all is someone who’s paying cash and doesn’t need a mortgage. Only one in four buyers is lucky enough to be in this position; if you’re not, make sure you have an “agreement in principle” from a mortgage lender confirming that they are willing to lend you enough money for your purchase. For bonus marks, get a solicitor lined up to handle the legal part of the purchase too. By evidencing that you’re a serious, well-prepared buyer who won’t let the seller down, your offer will go to the top of the pile. Making a low offer Even if you make your offer to the seller’s estate agent over the phone, always follow up with an email to explain how you came up with the figure you’re offering and make the case for the seller to accept. Show yourself to be reasonable. It’s perfectly fair to ask for a discount off the asking price if the home needs doing up or your research has revealed an issue, or because the place is overpriced compared to similar homes in the area. You’re most likely to succeed if you show you’ve done your homework, and aren’t just taking a cheeky punt. Above all, show the seller (and the estate agent) that you’re a reliable buyer. Having all your finances in place and being organised could win you the day, especially if the seller is in a hurry or has been messed around before. Phil Spencer is a property expert and co-presenter of Channel 4 show “Location, Location, Location”. He is also the founder of Move iQ