How low can you go?

Some homes just have to be sold. Robert Liebman investigates the best way for house hunters to strike a bargain

It's Tipp-Ex time in the world of property prices. Whenever the advantage shifts from sellers to buyers, estate agents start replacing old prices with more realistic, lower prices. Some properties downsize several times.

It's Tipp-Ex time in the world of property prices. Whenever the advantage shifts from sellers to buyers, estate agents start replacing old prices with more realistic, lower prices. Some properties downsize several times.

With Christmas approaching, many vendors want to sell as quickly as possible. Sellers, particularly of properties that have been sticking, face being stuck well into the new year. Their "positively absolutely lowest price" may rest on increasingly wobbly foundations.

"There are always two types of vendors: discretionary - who can choose to sell or not to sell - and compulsory," says Gideon Sumption, the regional director of Stacks Property Search & Acquisition's Somerset and Devon office. "With compulsory vendors, remember the four Ds: developers, death, debt and divorce."

In this context, "developers" refers not to large companies but to individuals who buy a property, do it up, live in it for a time to avoid capital gains tax, and then sell and repeat the cycle with another property.

"In general, amateur developers will catch a cold in this market," Sumption predicts. "Most will not have a cash hoard to fall back on to fund two properties simultaneously. They can rent out one of the homes they developed, but most of them want to add value by improving the appearance to achieve a premium, and as soon as you let, much of that advantage evaporates. Renting freezes the process, putting on hold something they want to progress."

Pressure to sell also usually applies to the grimmest of the four Ds: "Executors have to liquidate the property. It is their duty to sell, and if they cannot sell it by private treaty, it will go to auction," Sumption explains.

Vendors naturally hold the cards close to their chests, but considerable flexibility is already evident. In Cheshire, a property developer is trying to sell a Grade II-listed corn mill that he converted in Burland, near Nantwich. This unusual, exceptionally bright and spacious property has extensive outbuildings and, from atop the cylindrical mill, views to die for.

Although it has been on the market for more than five months, Graham Adnitt, of Jackson-Stops in Chester, says that "the owners are not in a tearing hurry to sell and will not reduce the guide price of £1m. They are renovating a barn and can afford to keep both properties, but if a cash buyer were to offer £900,000, for example, they would consider it."

The Grade II-listed, half-timbered Manor House in Swineshead, 13 miles north of Bedford, is an executor's sale. The eye-catching three-bed house includes a self-contained first-floor flat on a 1.75-acre plot with a tennis court.

Richard Chamberlain, who inherited the house with his sister, admits that it needs considerable refurbishment. "This was our family home for 50 years and it is less beautiful on the inside than the outside." The price has been cut to £845,000 from £875,000, but offers in the upper £700,000s will be entertained. Jackson-Stops' Woburn office is handling the sale.

Chamberlain has faith in the house's attractiveness and in market trends: "We put it on the market at the end of June, had about 40 viewings and one offer, which was for more than £800,000, but they had to withdraw because they could not complete in time for their children's schooling.

"If we don't sell by Christmas it is unlikely to sell until next spring. But we will have gone through the expense of looking after the house through the winter, and will be less willing to entertain a lower price. The fundamentals, such as low interest rates, are mostly solid, and I think confidence will return. The right person could turn this wonderful old house into a glorious old house."

If you do intend to test the real bottom line, buying agent Sumption suggests that you do so tactfully and strategically. For one thing, the market is nowhere near as dire as it was at the height of the 1990s recession. "We are on a seesaw between a bear and bull market. I expect the market to be static because the majority of the market - 70 to 80 per cent - is discretionary. We are not yet in the desperate situation of interest rates at 15 per cent paining the vast majority of homeowners. It is important to pitch your offer correctly. If the vendor is discretionary, a low offer achieves nothing."

Instead of making a derisory bid, "offer 20 per cent less. If you offer lower, you will be told to go away. To be taken seriously, you need credibility. Get them talking to you. Then get a survey. Then lower your offer again," Sumption recommends.

Of course, Sumption is a practised hand, a professional trained to analyse the seller and their circumstances. Not all vendors are desperate. Regardless of market conditions, quality properties find buyers, and the latter, while relatively scarce, are hardly non-existent.

One bungalow, Whinlatter in North Chideock, Dorset, entered the market in the early summer with an original sticker price of £465,000. This was whited-out six weeks later to £435,000 and reduced again after a month to £410,000. During that time, an offer less than £410,000 was accepted but the would-be buyer withdrew when his buyer pulled out. Whinlatter has just gone under offer again.

Jackson-Stops (Chester): 01244 328361; (Woburn) 01604 632991

Stacks: 01884 849144

Goadsby & Harding (Whinlatter): 01308 455455