In part 2 of our articles on top tips for first time buyers we focus on property viewings and mastering the art of negotiating a property price with estate agents.
Let’s hear it for estate agents everywhere – a round of applause, please. While still recovering from a double, almost triple-dip recession, estate agents are playing a vital role in keeping our economy moving. They facilitate communications amongst sellers and buyers of property and they know a thing or two about negotiating property prices. Their role is to achieve the best possible price for the seller, while enticing hungry buyers at the asking price or higher. The estate agent therefore, although not supremely popular, is a key player in this process.
Negotiating a property price for your first home is not as scary as it sounds. You have to be bold and trust your instincts somewhat. It is useful to establish good relations between you and your chosen agent fairly early on so that negotiating a property price is more art-fare than warfare!
Estate agents are trained in providing an indicative valuation of a property’s worth unlike surveyors who provide a valuation based on the structural condition of the property. Estate agents valuations will be based on their own opinion of the market taking into consideration local amenities such as transport links, schools and high street shops.
It is therefore important that you do your own research into property values in your search area so that when it comes to negotiating a property price, you can validly explain the reasons for your offer. Experienced and reputable agents will be open to negotiating a property price and can even encourage a seller to accept a price, but ultimately it is the seller’s decision to accept or reject an offer. Don’t rule out negotiating a purchase price for substantially lower than advertised as agents have to put forward all offers received even if they are ridiculous. However, people have different reasons for selling; they may want to urgently downsize and need the money as soon as possible, and so what may seem like a crazy offer may lead to surprising results.
Finding your home
From the eyes of the first time buyer, the world can seem a cruel place. You have to scrimp and save every penny to afford a decent deposit by which time property prices rise again and the wait continues. However, the last 6 months has seen a comparable increase in first time buyers in the market for the last 5 years, which means lending conditions are improving and first time buyers can finally step up the ladder after years of being denied or calling on the bank of Mum and Dad.
For the first time buyer you may be confused about where to start looking. Finding a property that ticks the majority if not all of your boxes is a good start. Making lists helps. Think about what is important to your lifestyle and see if you can achieve that in your chosen property. For example, you may want to be near a train station for your daily commute to work, or have a local gym or garden area. Don’t rely exclusively on pictures and maps, go and see the place in person as often pictures can be deceiving, having been air-brushed or made to look bigger than they are (yes, it does happen!).
Prepare to be flexible about what you want, particularly in dense property markets. Consider whether it really is imperative to live within 10 minutes walking distance of your friends, the local pub or nightclub. Being a homeowner often results in making changes to your priorities and lifestyle. While it is important to get what you want, do remember that you are competing with other first time buyers who have a similar budget to you. Delaying making a decision or rejecting a suitable property for non-essential lifestyle reasons could be a very expensive mistake if the property market begins to change.
Sign up with a few reputable local estate agents and clearly explain what you want otherwise you are likely to be shown everything within your budget which may only serve to confuse and frustrate you! Getting clear on what you want, where and how much you are prepared to for it is an essential exercise.
Line up your property viewings at times convenient to you. See your property 2, 3 or even 4 times and at different times of day, so you can assess the vicinity, the traffic, the neighbours, and so on.
Tactically, you may want to wait a few days or even arrange a second property viewing before making an offer. It will depend on the market you are property viewing in and whether a ‘bargain’ is likely to be missed if you do not act fast. It really does pay therefore to do your research first.
Regardless of whether or not there are competing first time buyers, setting the right tempo and appearing neither too desperate and hounding down the seller’s agent nor too aloof and out of contact, will assist you in perfecting the art of negotiating a property price. Stay calm and always be polite. This will give the impression of a first time buyer who knows what s/he wants and who won’t be pressured into going over budget to bag the property.
When property viewing, make sure you have your criteria to hand. Keep a pen and notebook with you and write down any thoughts/questions that come to mind. Ask questions during the property viewing. For example, if the heating is only electric and you want gas, you will need to factor in how much you would need to spend to install gas central heating. A good estate agent will be able to answer your questions as you raise them.
Making the offer and beyond
A property is only worth what you are willing to pay for it. Quick and easy internet research will reveal information about other properties in the area such as property values, rental yields, upcoming developments or expected changes in the area that you can use to guage your bid.
Communicate with the estate agent that you are content with an early completion, so long as all of your requirements are met.
As a first time buyer, you can move quickly as there is no chain beneath you. Your deposit finance must already be available if you want to progress matters quickly. You should already have a mortgage agreed in principle as estate agents often want this assurance from first time buyers before taking an offer seriously.
You will also need to arrange your mortgage offer and survey. The estate agent will want to know when this will be sorted out fairly quickly as this is a specific indicator used to assess how committed you are as a first time buyer.
Whilst the estate agent is instructed by the seller, they are also there to help you too. A skilled estate agent is one that manages to hold a deal together and work with both the seller and the buyer. Keep your estate agent updated as this will help keep information flowing between you and the seller and prevent any communication breakdowns.
Once the process of negotiating a purchase price has been settled, solicitors are appointed by the buyer and seller and with the right professional guidance the matter will proceed smoothly to a successful completion. The seller will collect the proceeds of sale, the buyer will move in to a new home, the estate agent will be paid its commission by the seller, and the first time buyer can get on with the art of living happily ever after!
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