Before you make an offer for a property, consider carefully the following 4 tips:
1. Is the property at market price ?
If a house is already at market price, and the owner or agency selling it knows this, don’t expect a significant reduction in the price, unless you know that the owner wants to sell quickly. What this means is that you need to know as much as you can on the circumstances of the seller and on local market prices. Use expert intermediaries to discover this, which can be the estate agent or better still, the property finder who will be on your side. You can also learn a lot from checking how long the property has been on the market and how the price has evolved to date. So getting this information is critical before making an offer.
2. How good is the property you are considering ?
You can be fairly sure the seller will highlight the strengths of his property, the fact it is well located, close to sea, has a view, in a quiet setting, has been renovated recently etc… However you will be in a better position to judge how rare the combination of positive points is from your home hunt. The weaknesses you will have to identify yourself, unless you have an expert at your side assisting you. There is the checklist of items to watch out for, and in the South of France you need to check if the area is not too busy in the summer, if new developments are likely nearby, if flash floods occur, the cost of work to meet the diagnostic requirements, etc… These points can then be used to justify a lower offer. As part of of Smartfinder Home services, we offer a complete checklist to ensure you hold all the cards in your hand before you make an offer.
3. Negotiate from strength.
If you have a shortlist of houses you are interested in, and you share this fact when you make your offer, you will be in a far stronger position. But making an initial offer that is too low can upset the seller pointlessly and reduce your credibility, to the point they may refuse to negotiate with you any further. This is why it is important to know the history of any previous offers made and the current state of mind of the seller. Again estate agents are usually very good in advising on an acceptable initial offer, as it is in their interest to get the negotiation off the ground to facilitate the sale. A property finder will protect you from dealing with less competent agents who luckily are a minority.
4. Why negotiate if the house is well within your budget ?
If you are lucky enough to have found your dream home within your budget, then there may be other benefits than a low price you may want to have, such as furniture if the house is well decorated, or getting items fixed before you make the purchase. Maintaining good will is often important, especially in the smaller villages of Provence. However you should still check if you are close to market price, as it often turns out that buyers resell their property sooner than they anticipate.
Lastly a frequent misconception of buyers in real estate, is that the fewer intermediaries there are, the better the deal will be. This is also what sellers think, and after having done all the work of placing adverts on portals and doing visits they will want to pocket the 5% agency commission for themselves. Another reason negotiating with sellers directly does not guarantee a better deal, is that sellers are often emotionally attached to their house and do not readily adjust their price to market prices.
Check our unique "2016 Offer" of a reduction in the overall commission by up to 15%, if you are planning a house purchase in 2016 (on purchases over 300K Eur), and you could possibly save thousands on your house purchase !