If you’re partial to a bit of Monty Python, you might recall the scene in their film The Life of Brian where Brian, in a desperate attempt to hide from the Roman guards, attempts to buy a fake beard from a trader. When he offered the asking price of 20 shackles the trader is incredulous and demands instead to barter – eventually taking less in order for him to feel like it was a good deal.
I often think of this whenever I’m asked by a buyer what they should offer for their target property. There seems to be an obsession with the deal that casts a shadow over achieving the original main aim of buying their first home. If I’m honest, it’s not just first time buyers who are guilty of it – we all are!
I’ll always remember a couple of buyers who, after viewing a stunning property, burst into tears of joy when I told them the price, some £20,000 UNDER their budget. They then, against my advice, submitted an offer way below the asking price. The owner duly declined and someone else who had obviously been keeping tabs on the property, and probably got tipped off from the agent that a low offer had gone in, then swooped and bought it from under my punters’ noses. If I’m honest, it served them right. This obsession with the deal stood in the way of them getting their dream property and it will no doubt always be the one that got away.
There’s a myth that strong or hard negotiators get the best deal. In my experience, the best deal is where both parties feel that what has been agreed is fair. Sure, one side may well come out slightly better and you’d hope that’s you, but it’s rarely a good way to start a transaction if a party feels like they’ve been robbed.
he agreeing of a price is only the start of what can be a rather drawn-out process – the conveyancing can take up to two months. In this period there may well be a time when you ask for something from the vendor, eg access to measure up, extra surveys or even extended time to complete. There’s also the added bartering of what the owner might leave in the property or sell on to you in terms of carpets, curtains etc. When you enter into a deal with an owner, you enter into a relationship with them. Owners can be very helpful to a first time buyer; offering recommendations on the area, and keeping the property in good condition during the conveyancing period. I’ve also seen deals where the owners (feeling slightly put out over the price agreed) have left the property in an awful state – they’ve even been known to take the lightbulbs with them! I’m not asking you to become best pals with the vendors – after all you are sitting at opposite ends of the table when it comes to the deal – but it is worth remembering that you both have something in common, you want the deal to be done and as smoothly as possible.
The chances are that you might be competing with other buyers who are interested and may even be shaping up to make an offer on the property. I always recommend to my buyers that they put the best version of themselves to the agent and the vendor. I’ve written in this column before that the agent, while acting for the vendor, will be making recommendations about each buyer’s ability to perform in any potential deal. Vendors will be influenced by this, but they also like to sell to people they like. While an estate agent might argue that a developer or investor might offer a quicker or smoother deal, many owners like the idea of selling to someone who will move into the property as a home – especially a young couple or family – they were in the same position once and you’d be amazed how that can influence the decision.
Don’t get me wrong, I’m not suggesting that everyone should submit asking price offers, far from it. I’m just a little tired of buyers obsessing over putting in “a cheeky offer”. If you think it’s cheeky, the owner might think it rude and that’s not the best opening gambit. There needs to be a reason for your suggested discount. Residential property is valued on comparable evidence so if a 450 sq ft flat in good condition sold recently for say £200,000 then one a similar size just nearby, but in worse condition, is probably worth maybe £190,000. Over-simplified, I grant you, but you get the point. The chances are you’ve been trawling the internet and keeping an eye on prices as you’ve been saving. so you should have at least an idea of ball park values. If your objective is to buy a bargain then be prepared to walk away. If you’re focused on buying your first home, then be prepared to spend all of your budget or you might be the person driving past the property lamenting the one that got away.
TV presenter and property expert Jonnie Irwin gives his thoughts and views on first time buyers and the housing market