The ability to negotiate a house price isn’t a skill that comes naturally to everyone. However, with house prices on Rightmove averaging just under £1million in south west London, even a small percentage drop could make a big difference to your budget, whether you are buying or selling.

Last year was a rollercoaster ride for the UK housing sector with steep price rises and intense demand, then a cooling of the market following autumn’s interest rate rises. It’s hard to know what 2023 will bring, but although prices are expected to stabilise, demand for desirable properties is still out there. While this may mean it’s harder to grab a bargain right now, it’s always worth understanding how to negotiate on price. From assessing a property’s value to knowing when to offer less, we look at the stages of a successful house price negotiation.

House price negotiation tips for buyers

1. Know your market

Before you start viewing properties, you need to have a good idea of how much you should be paying for the type of home you want in your preferred location. Look carefully at homes for sale and how they are priced on property portals and estate agents’ website. Analyse the price of the home and what you get for your money in terms of number of bedrooms, floorspace and key features. Look too at recent sold price as well as how long the properties were on the market.

2. Find out about the property

Find out as much as you can about the property that interests you by asking the estate agent or seller plenty of questions. You need to know how long it has been on the market, the reasons for selling and whether there’s any urgency to the sale. Find out how much interest there is in the home and whether there have been any offers. When you view the property, get a sense of what might need replacing – windows, boilers, kitchens and bathrooms will all be costly.

3. Know your financial position

You need to have a realistic idea of how much you can afford to pay for the property – this will help you set a maximum budget. If you’re looking at properties at the top of your comfort zone, you will have to be prepared to walk away if your seller won’t negotiate. If you need a loan, having an agreement in principle and a deposit will make you a more attractive proposition with more bargaining power. Remember to factor interest rate rises into your final budget.

4. Decide how much to offer

How much you offer will depend on the things we’ve mentioned – the strength of the market at the time, the condition of the property and your own budget. If the home has been on sale for a while; if the vendors need to move quickly to secure their own purchase; if you’re a cash buyer, for example. All these things could give you the edge and allow you to go in lower. Other factors, such as your being well organised and ready to act or the seller using multiple agents – all eager to make the sale – can also have an impact.

As with any form of haggling, begin with a low offer you are prepared to increase – 5-10% below the asking price is a figure that’s often quoted.

5. Put in an offer and emphasise your strengths

Don’t just make the offer, present your case for buying the property alongside how much you want to pay. So, if you’re a first-time buyer, you’re chain free, you have a mortgage agreement in principle or you’re a cash buyer, these could make you a more attractive proposition than asking price alone.

6. The second offer (and third)

If your offer is rejected, the estate agent will come back to you with the opportunity to increase your bid a second or even a third time. This is when the process can become nail-biting but keep your cool and stay business-like and polite. Don’t be tempted to go above your price ceiling and be careful about sellers ‘throwing in’ items such as white goods rather than dropping their price.

7. Negotiating house price after survey

If your offer is accepted, you could ask the seller to take the property off the market and minimise the risk of you being gazumped. You could also take out buyer protection insurance at this stage, just in case. It’s a good idea to move swiftly to arranging the survey. You can still negotiate on price if the survey highlights issues that will incur costs for you – or walk away from the sale if you think that’s best. Remember that your mortgage company’s valuation survey could also question the price you have agreed to pay.

House price negotiation tips for sellers

1. Know how much your house is worth

The same applies to sellers as buyers – do plenty of research into the current market in your area and recent sold prices, so you know the true worth of the property.

2. Find out more about your buyer

When an offer comes in, find out as much as you can about your buyer. Are they a cash buyer, a first-timer, do they have a mortgage offer, have they sold their own place, are they in a chain, or moving into rented accommodation? Also find out if they have a conveyancing solicitor ready to go – this will give you an indication of how organised and serious they are.

3. Get advice from your estate agent

Your estate agent has the experience and expertise to advise you about whether to accept, counter or reject an offer so talk to them. They can give you their perspective on whether they think the buyer will go higher and how much interest the property is attracting – whether you could hold out for a higher offer.

4. Consider a sealed bid

If there is plenty of interest in your home, you could consider sealed bids. This approach is a bit like an auction. Buyers submit sealed single bids to your estate agent. They can only submit one bid so it should be the maximum they will pay.

5. Make a counter offer

If you receive an offer that you feel is unacceptable, you can go back with a counter offer. If you are willing to negotiate, your counter offer will probably need to be below the asking price – especially if you added an extra 5-10% in the first place, as some sellers do. But avoid going below the price your research tells you the home is worth.

If there are issues with the property or things the buyer doesn’t like, you could offer to complete the repairs rather than dropping the price. You could also throw in extras such as furniture items the buyer particularly likes.

If you’re looking to buy or sell in the south west London areas of Wandsworth, Clapham, Battersea, or Balham, talk to us. We’d be happy to advise you about achieving the right price for your home in the current market and show you our current properties if you’re hoping to buy.