The hottest deals of summer

The annual slump can be good news for bargain hunters, says Stephen Pritchard
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The Independent Online

The summer months usually see fewer properties changing hands than either the spring or the autumn. But evidence suggests that buyers who are prepared to give up their summer holidays in order to move house are driving hard bargains.

Yorkshire Bank's recent survey of the housing market found that 43 per cent of first-time buyers are willing to offer under the asking price for a property. The previous survey, in April, found that just 19 per cent were as confident.

WHEN IS IT ACCEPTABLE TO OFFER UNDER THE ASKING PRICE?

An asking price is just that. A would-be buyer is under no obligation to offer the full price for a property. But nor does the seller have to accept a lower offer. In England and Wales an offer is not binding until exchange of contracts (in Scotland, which has a system of sealed bids, offers are binding under almost all circumstances). There is no hard and fast rule to calculate how much to offer. Keep in mind that the estate agent must, by law, pass on any offer regardless of its value.

ARE THERE ANY NEGOTIATING TACTICS THAT WORK IN THE BUYER'S FAVOUR?

Gary Lumby, head of mortgages at Yorkshire Bank, says that first-time buyers are always in a strong position because they are not in a chain. And because there are fewer first-time buyers in the market at the moment, they might be able to use that to strengthen their negotiating hand. From a seller's point of view, a lower offer from a chain-free buyer can make sense, because it will allow them to move on more quickly. But all buyers can negotiate by setting a budget, and making it clear to the seller that that is what they are able to pay. Being willing to walk away from negotiations if the seller will not compromise is critical to making this approach work.

HOW DO I KNOW WHETHER A PROPERTY IS OVER-PRICED OR PRICED TO SELL?

One way to gauge a property's appeal is to ask how long it has been on sale.

Even in relatively quiet property markets, attractive homes that are keenly priced can sell within days. If a property has been on the market for months, then the chances are it has serious drawbacks, is over-priced, or both.

"Sellers do sometimes push for that bit extra, but buyers will not go for it," says David Hollingworth, director at London & Country Mortgages, a broker. "The vendors may believe they are asking a fair price, but the fact that the property has not moved suggests that buyers have a different opinion."

IT IS WORTH ASKING THE SELLING AGENT FOR THE PROPERTY'S HISTORY

A buyer might have made an offer and pulled out for legitimate personal reasons, forcing the house back on to the market. But if it has been on sale for months with few viewings, that tells its own story. The estate agent might well be able to say whether the vendor is open to accepting offers.

DO THE BUYER'S FINANCES AFFECT NEGOTIATIONS?

They can do - although perhaps not as much as during the boom markets of a few years ago. Relatively few people can buy a property for cash and, with the exception of first-time buyers, almost everyone has a property to sell. It is worthwhile to talk about mortgage options with a broker before making an offer. The broker will be able to arrange a mortgage "offer in principle" from a lender, which will state how much you can borrow. But this is not the same as a full mortgage offer, which can only be made once the lender has details of the property. "Applications in principle can be useful but we are hesitant about providing people with lots of these, because mortgage deals might have changed significantly by the time a buyer finds the right house," says London & Country's Hollingworth. None the less, a buyer who has researched their finances properly will be in a much stronger position, both to make an offer and to know exactly what they can afford.

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