How to Negotiate When Buying a House

A lot can hang on your house price negotiation strategy, especially if your heart is set on buying a property. In over 80% of house purchases the purchase price is negotiated at the outset, when you make your initial offer. You might negotiate after your initial offer if:

Both of these would need you to start negotiations with the seller to find a sale price that both you and the seller will be happy to agree upon. However, knowing how to negotiate when buying a house is incredibly difficult, especially when you are negotiating on the price of something you really want. You might even feel that the seller was hiding something or that the estate agents were trying to get more for the property than it is worth.

This article explains the best way to negotiate a house price reduction.

Did you Know?

In England and Wales' current housing market, and for some years, more than 2/3 of all properties have actually been sold for below their listed asking price, according to statistics from the National Association of Estate Agents (NAEA) derived from regular feedback from its member branches.

March 2018 was the most recent record, when a huge 86% of all properties sold for below asking price (click to access our April 2018 housing market report which discusses this and other prominent housing market developments.

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In any negotiation both the seller and the buyer need to win

In any successful negotiation, both sides need to feel they have won. For you it'll be that you can carry on buying your dream home at a price that is fair for you. For the seller, they need to feel they are getting a fair price for their home in its current condition. These seem the same, however most sellers will have had an estate agent set their expectations on what their home is currently worth in its current condition. It will be difficult for the seller suddenly to have to shift their thinking from their property being worth £250,000 to £230,000. This shift in return on their sale could mean they can't afford to move or they'll have to buy somewhere else - you can see how this can be upsetting for the seller.

This is why when negotiating with the seller you should appreciate their circumstances and work with the them on finding a price that is more reflective of the, 1. current market value in the property's, 2. current condition.

You must inform your mortgage lender of any price reduction.
When buying with a mortgage, if you agree a reduction, whether it is an allowance or a reduction in the house price, you'll need to inform your mortgage lender and they'll need to reissue their mortgage offer to you. This can cause delays if left close to exchange of contracts as it can take 3 to 7 working days to get a mortgage offer revised and returned to your solicitor.

  • 1What is your property's current market value?
  • Before starting any negotiation you should research property prices in the area where you are buying. Prior to online search engines this would have been more difficult, however nowadays Rightmove and Zoopla offer market information linked to all their property listings. You can search for:

    • Completed property sales
    This is where you can get the most accurate data about what your property is worth. You need to look for properties on your street, with the same amount of floor space, bedrooms and bathrooms. Where properties differ in size this can become more difficult because more bedrooms and bathrooms will mean a higher purchase price.

    You should also be careful not to compare property prices for properties not on your street. A street in itself could add £10,000s to the purchase price (remember - location, location, location).

    In an ideal world there'll be a property that has completed over the last 6 to 12 months and it'll compare with a 5-10% increase for your property's current market value.

    Where there is a comparable house but it was sold over 12 months ago, then you need to check on the Land Registry to see how much house prices have gone up in your area over the last year (or however old the last property sold is). The Land Registry has a great tool for this and you can such comparable years and months going back to 1996. Click here to go to the Land Registry House Price Index.

    • Under offer
    You can check under offer properties however don't rely on this data. These properties haven't completed and the online property portals don't update their current offer prices so the advertised price could be £250,000, but the accepted house price could be £230,000.

    • For Sale
    Looking at other properties for sale is not an indication of what your property is currently worth. Asking prices are not always met and the fact that the seller is asking for this amount of money, doesn't mean this is what the property will finally sell for.

  • 2What is the cost to bring the property to a reasonable condition (or up to current market value)?
  • So now we know what the property should be worth if sold in good condition, you now need to factor in the cost to repair the property to a good condition. When you have a RICS property survey highlight defects inn a report, you'll need to get independent costings to repair the property to a good condition (in some cases, such as subsidence, these defects will materially affect the purchase price by tens of thousands of pounds).

    If there are material defects the costs of these should be deducted from the current market value to find the cost that is fair to pay in the property's current condition. Or, the seller can make good the works to bring the property into a reasonable condition.

    To find out more about a RICS property survey click here.

    How to start negotiations

    Once you know how much the current market value is in the property's current condition you can start negotiating with the seller. It is normally preferable to do this directly, however it is not always the case that you'll have their contact details and instead will need to negotiate through the estate agent.

    Now remember what we said about the current asking price? It is normally set by the estate agent and so any reductions in this could reflect badly on them. It is important to not make any accusations of the property being overpriced and to, where possible, keep the estate agent on your side by acknowledging how difficult it is to predict the property value in the current market.

    Example email to start negotiations with estate agent

    The following is an example email to start negotiations with the estate agent following defects being flagged inside your property.



    I hope you're ok.

    Things are progressing well for me with the conveyancing. My searches are back, enquiries are being finalised and I have completed my property survey; this final point however has flagged up some issues that I need your help with.

    The RICS surveyor has flagged up a number of issues that I was unaware of when I made my offer and we need to discuss how best to proceed.

    I'm sure you'll appreciate that when paying the current asking price of the property, I need to ensure that the property is in current market condition.

    The following defects were raised:

    • brickwork walls need;
    • barge boards are worn;
    • rendering is coming away and there is blistering of the render consistent with damp in walls. Also cracks in render;
    • window problems- bathroom rotted, kitchen sill not protruding out past the line of wall, rear bedroom water getting in;
    • flat roof in extension very badly installed;
    • dampness in bathroom and dining area and could cause problems to laminate floor;
    • trees in clay soil cause problems. These need seeing to; and
    • spotlights missing.

    I have spoken to 3 independent contractors and they estimate the costs for making the repairs to be around £4,000 (I've attached their quotes).

    The challenge is that any buyer will have these issues if they are looking to buy this property [and for some mortgage lenders they may not lend based on these defects.]

    I am still very keen to buy the property and will be looking to exchange over the next few weeks, however I would ask that either the above items including the damp are addressed, or we agree a reduction in the purchase price of £4,000 and I’ll handle the repair works to the property after I move in.

    I hope that we can move forward from here because I really want the house, however I can’t afford to absorb these repair costs.

    If the seller agrees to reduce the price it'll take me a few days to get my mortgage offer reissued to reflect the new price so the sooner we can get this agreed the better as I don't want to hold up exchange because we are waiting for my mortgage lender.

    I look forward to hearing back from you and the vendor.

    Kind regards,


    Note: This is only a template letter and should be tailored to your own individual circumstances.

    Have a plan B

    The feeling of only having one property to go for makes the loss of it even harder if you have to pull out. This reaction is common when there appears to be a lack of availability on what we really want - ever seen someone take the last biscuit in the tin and then all you can think about is how much you want a biscuit.

    The best solution to this emotion is to keep an eye on the property market and don't stop viewing new properties. This doesn't mean you have to put offers on the properties you find, however it does mean that if something goes wrong and you find another property you like, it makes the decision of pulling out less emotional and more based on facts.

    These tips will give you the best chance of negotiating a reasonable reduction in the purchase price of your new home. Remember, every pound you pay over the current asking price in its current condition, will mean the property will have to go up in value, otherwise you will be in negative equity.

    For more conveyancing support call our team of specialists on 0333 344 3234 (local call charges apply).

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