A good deal?

I often beg clients to ignore the asking price. To me they are just an indication of the owners greed or the agents ‘enthusiasm’ to get the business. A property is worth what someone will pay for it. It’s up to the seller to decide if they want to take that offer.

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My client saved 17% on the £3.3m original guide price. The seller was simply too greedy.

Nationally the average home sells for around 4% less than the asking price. People seem to think that it would be rude to offer much less or that the agent wouldn’t take a low offer. Half of all homes don’t sell. Most owners would be flattered to get any offer but most buyers are embarrassed to make what might seem to be a low bid.

I explain to clients, “you make money when you buy, not when you sell. We’re not trying to make a friend, we’re trying to buy an asset. If the agent isn’t weeping as you confirm your terms then you’re probably bidding too much!”. Remember, the agent is legally obliged to put all bids to their client, if the seller is unhappy the agent is being paid to take the grief. They only get paid if a deal is done so many will lean on the seller to take a sensible, well structured offer. If you have prepared properly then you’d be surprised how many sellers will take an offer.

First offered to me in Nov 2014 at £5m I agreed terms to buy this lovely home at £3.6m.
First offered in November 2014 my client had this lovely home under offer at £3.6m.

This is a tough market for both buyers and sellers. What is a property worth? It’s worth what someone will pay. The seller can ask whatever he likes, it’s up to you as the buyer to decide what you are prepared to bid.

First offered at £2.2m I agreed terms on behalf of a client at £1.925m, a 12.5% saving.
First offered at £2.2m I agreed terms on behalf of a client at £1.925m, a 12.5% saving.

Sadly there’s only so much an agent can do. Great deals can be put together but it isn’t technically done until contracts are exchanged and the sale goes through to completion. Whilst solicitors were instructed and we were a matter of hours away from exchange in two of the examples I have shown my client pulled out at the 11th hour! Neither withdrew because of the deal itself, each had their own personal reasons and in both cases we were rightly left with a considerable amount of egg on our faces but dealing with that is part of my job. The selling agent had invested a huge amount of energy into making it happen and like the seller no doubt felt very let down. It’s one thing to negotiate a cracking deal and whilst I can take some pride in the work I did putting them together they really only count if they go through.

Some will no doubt claim that the original guide prices were too ambitious, that the selling agents or their clients had been too greedy and that they were never worth the money. You can ask whatever you want for a property and we all know of examples where people seem to have picked a series of numbers at random. My point isn’t that I negotiated a significant discount from an imaginary number it is that it’s always worth negotiating. According to Rightmove the average deal is agreed just 4% below the asking price. The British get embarrassed about making an offer but they shouldn’t. Sometimes it’s worth paying more than the guide price – some properties only come up once in a generation and are worth paying a premium for but most homes have been put on the market with a guide price that the seller expects to get chipped. Do him a favour and make him an offer. The worst that he can do is to say “no”.