How much should you negotiate on a property price?
PUBLISHED: 15:54 12 December 2016 | UPDATED: 15:54 12 December 2016
Most peole attempt to negotiate on a property price but how do you decide what to offer and how likely is it that the vendor will accept?
It is often important to make an offer when buying a property – but how far below the asking price should you go, and what is the norm? A study by LPI-SeLoger covering 2,000 estate agents across the country examined the trends in margins of negotiation, the difference between the amount sellers want and the amount they will settle for.
There is good news for prospective property buyers in France, as margins of negotiation have dropped to an average of 4.3% across the country (3.7% for apartments and 5% for houses). The study suggests that the decrease is due to a combination of increasing price pressure and property buyers trying to keep prices affordable.
Buyers appear to have the best chance of successfully negotiating a price in Brittany where the margins are 7.5% and Picardy where margins are 6.6% for houses and 6.2% for apartments. For those buying an apartment the regions where you can expect to get a good deal are Aquitaine (margin of 8.3%), Nord-Pas-de-Calais (margin of 10.4%) and Poitou-Charentes (margin of 7.7%). While those buying a house can expect to be able to negotiate a lower price in Languedoc-Roussillon (margin of 6.3%), Upper Normandy (margin of 6%) and Pays de la Loire (margin of 5.4%).
Tips for successfully negotiating for a property
1. Get your finances in place before you make an offer and know what you can afford – if you can prove you have the cash or an accepted mortgage offer and are able to buy now then the vendor will probably be more inclined to consider your offer.
2. Make your offer reasonable. Extremely low offers are not likely to be considered serious and could even offend a vendor and make them less inclined to sell to you even if you increase your offer. However, make sure you go low enough to give you some negotiating room.
3. Ask your agent for advice on what offer to make. They will be in the best position to know what the property is worth in the current market and what the vendor will accept. Yes they get paid a percentage of the price so the more it is sold for the better for them but at the same time they do want to agree a sale before another agent does.
4. As well as negotiating the price of the property you can also try negotiating the agents’ fees. As these can be up to 10% of the property price this could save you a significant chunk of money.
5. Do your research – find out what similar properties in the area have sold for recently and how long this property has been on the market. The longer it has been on the market the more likely a vendor is to negotiate.
6. Make a list of things wrong with the property, e.g. if the boiler needs replacing or if there is work to do on the roof, as this will support your argument for a lower price.
7. Be aware that a written offer (offre d’achat) can be binding so don’t make an offer you can’t afford or submit written offers on several properties as you could end up committed to more than one property!