Nearly a third of homeowners fail to negotiate on property prices
Brits are at risk of paying over the odds on their house purchases, as new research from Barclays Mortgages reveals that nearly a third (30 per cent) of British homeowners did not negotiate at all on the price of their current property.
A huge stumbling block for many is a simple lack of knowledge, with over one in five Brits (22 per cent) confessing they just don’t know how to negotiate.
Research reveals homeowners aged 25 to 34 experience the most anxiety or stress when negotiating, compared to those aged 65+ who are much more comfortable with the process and therefore find it the least stressful.
The anxiety holding back those aged 25 to 34 comes at a cost, as more than a third (35 per cent) of homeowners in this age group say they had to spend more of their savings to afford the house they wanted.
Other fears holding Brits back from haggling down the price of a property include:
- Fear of losing the property (17 per cent)
- Fatigue at the process of buying and just wanting it over (10 per cent)
- Finding negotiating embarrassing (8 per cent)
- Finding negotiating intimidating or scary (8 per cent)
- Not wanting to upset the seller (7 per cent)
Rob Smith, Head of Behavioural Science at Barclays said:
“Our research has found that a considerable number of Brits lack the skills or confidence needed to negotiate successfully on the price of their home.
We are more likely to negotiate on a used car than we are on a property, highlighting the unique emotional nature of one of the biggest purchases people make in their lifetime
Understandably the process can feel daunting, particularly if you fear losing out on your dream home, but a successful negotiation can result in extra money to bolster your family finances or invest back into your home.”
Moving on up the property ladder
Learning from this costly experience, over half (52 per cent) of all homeowners vow to negotiate more on their next home so as to not miss out on those crucial savings.
The nation’s homeowners revealed their aim to knock an average 18 per cent off their next property purchase – the equivalent of £40,000 based on the average UK house price, or the cost of a loft conversion.
Those aged 25-34 are even more committed to striking a deal on their next property, with 60 per cent determined to haggle more on their next home.
Top tips from Rob Smith, Head of Behavioural Science at Barclays:
Negotiating isn’t for everyone, and sometimes you may not be in a strong position so it’s not worth the risk.
However, for those who feel they are in a position to negotiate but remain daunted by the idea, Rob Smith has compiled some top tips to demystify the process and make it that little bit easier:
Do your research
Nowadays, there are so many tools that provide you with a lot of the information you’ll need to make an offer on a house. Never enter a negotiation without having done extensive research.
For example, check out the surrounding area and what the houses are like, look at the local schools, shops and facilities, and crime rate.
Don’t forget to check how long the property has been on the market, and if the price has been reduced already. You should come armed with the information, as well as questions or issues you want to raise.
Know your competition
It’s worth checking if there is anyone else also offering for the property – as this will affect the dynamics between buyer and seller.
You can always increase an offer that was too low if there are no other bids – but not if someone else’s bid gets accepted.
One useful tip is to try and understand the mind set and emotions of the seller, perhaps they are keen to sell or they have already reduced the price.
Know your end goal but also be realistic
It’s important to have in your mind exactly what you want out of your property, and your financial limits.
Estate agents may show you properties outside of your price point, and perhaps that kitchen island or bi-folding doors might tempt you to stretch your budget a little bit more.
But take a step back and make sure it’s really what you want – and can afford – before you start haggling.
Find the communication style suitable for you
Some find face-to-face meetings easier, in order to get a feel and understanding of the person you’re negotiating with.
In the current climate, this is less easy to arrange and many don’t want to meet in person. However, not meeting face-to-face may also help you disconnect emotionally from the seller and it reduces feelings of confrontation, which most people shy away from.
But whether you meet face-to-face or via the phone, it’s crucial to always follow up in writing after any conversation you have, as keeping a paper trail will help leverage any potential fall-backs.
Be patient and use time to your advantage
Buying a home is an important process, and for many it’s the most expensive purchase they’ll ever make.
So, let yourself take the time you need to feel happy with your offer; you don’t want to feel pressured to make an offer or ultimately regret anything, and no matter how much you love this one, you will find another you love even more.