How to negotiate in a softer housing market
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Seller expectations remain high and buyers want low prices in a softening market. After years of rapidly rising house prices, the recent slowdown took many people by surprise – not least those with a home to sell, creating a big gap between buyer and seller expectations.
Albeit whatever the state of the market, every negotiation is based on the premise of vendors wanting to receive the highest possible price while buyers want to pay as little as possible. Both however, need to give careful thought to how they approach the negotiation.
From a vendor’s point of view, it’s crucial to price the property correctly from the start. The most incredible homes in the world won’t sell if they’re overpriced. Currently potential buyers are waiting for prices to fall further meaning fewer are actively looking, and with more properties to choose from so it’s harder to convince buyers to pay premium prices. The longer a property stays on the market, the less likely it is to sell at a higher price, and unless you bought in the last two years or so, you’re probably going to get a higher price than you paid anyway. And, of course, if you’re selling to buy, you’ll be paying less yourself. It can be helpful to think in terms of the changeover price, rather than the price you may have achieved a few months ago.
If a property is on the market now, it’s there for a reason. This isn’t the time to be testing the market or selling if you’re not in a hurry. If you do need to sell you should be prepared to take every offer seriously, even if it’s not at the level you were hoping for. At least enter into negotiations to see how far you can get your potential buyer to go. When buyers have the upper hand, presentation is particularly important. You need to be clear about the attributes of your home –the unique selling points that make it desirable. It may also be worth spending some time and money on minimising anything that would cause concern. You don’t want potential buyers to go away with the impression that there are another five homes they’d be equally happy with. A good agent can identify a property’s strengths and weaknesses, and advise on everything from pricing to presentation to advertising. This needs to be considered on a case by case basis– for example, print media may work for some but might be a waste of money for others.
As a buyer today, you’re well placed –but you shouldn’t be too complacent. If you see a property that appeals to you, it’s also likely to appeal to other people so you can’t afford to sit back and hope that the price will fall. It may be sensible to start a negotiation process. Bearing in mind we only know the market’s hit bottom when it starts to come back up. By then, you could be too late.
If you need further support or advice, Equilibria Finance can guide you through this process.
Anthony Landahl | Equilibria Finance
This is for general information purposes only and does not constitute advice. With all of these options there are a number of considerations outside the scope of what is covered in this article that you need to understand to ensure your personal circumstances are taken into consideration.
