5 April 2009, The Observer
Falling valuations and desperate owners all point to property bargains. But, Graham Norwood reports, canny buyers can cut the price further.
Easter week is the traditional start of the house selling season but although prices are falling and many owners are desperate to move, professional buying agents say purchasers can get even better deals if they do their homework. ’Abandon any polite Britishness and treat the process as a hard-nosed business deal,’ is the advice of Charlotte Walker of Stacks Property Search.
She says you can see if a property is over-priced by asking a local estate agent what it would have sold for at the peak in late 2007. ’Subtract 30% to 35% or compare the price directly with values in 2004-05 where there should be parity,’ she says. ’Then look at things you’re going to have to do once you’ve moved in. Use them as a negotiating tool or suggest the vendor fixes any problems. Do this on a room-by-room basis. Take a notebook and camera and be methodical.’ Researching the reason behind the sale is vital. ’Ask the estate agent ’why is the vendor selling?’ and ’what’s the timeframe?’’ says Caroline Takla of buying agency Black Brick. She says sellers who are divorcing, or have a place to move to urgently, or have children who need to be in a school catchment area will be more willing to drop prices sharply to clinch a deal quickly.
It takes an average of 12 weeks and 13 viewings for a home to get a buyer now according to the Hometrack consultancy, and asking prices are 15% to 30% down depending on the area. Sellers know this, so should be flexible on price. So how can ruthless would-be buyers get the best possible deal? Buying agents are hired to locate suitable homes and negotiate a good price. They use a rigorous checklist and if they spot a problem, they go for the jugular.
Inside Kitchens: Are there leaks near the sink, dishwasher or washing machine? Check the ceiling for marks as the kitchen is usually just below the bathroom. Also check the water pressure is OK in the taps, particularly if the kitchen is on an upper floor or in a high-rise apartment.
Bathrooms: Get in the bath and check if it then separates from the seal. If the boiler is new, see a guarantee. If not, ask about service history (it must be checked annually). If it’s old, cut your offer by the cost of a new one.
Bedrooms: If you see blankets, hot water bottles and so on, the room is cold. Why?
Living rooms: If there’s a wooden floor, check to see whether it’s noisy. And does it contravene the lease in a flat? Ensure carpets and lights are included in the sale if you want them. Where there’s a chimney check the brickwork – black marks suggest the flue is damaged.
Staircase: Send someone upstairs and check for vibration or weakness.
Outside Brickwork: Any cracks? Is repointing required? Windows: Ask for guarantees if they have been replaced.
Roofs: Are they sound? Slate tiles usually last 15 years and a flat roof needs replacing after just seven years.
Gutters: If they’re blocked, water may well have penetrated the brickwork. If you see a problem but still want the property, set an ultimatum. ’Get the vendor to pay for and fix it or at least an undertaking that everything will be corrected prior to completion,’ says Richard Marsh of Property Vision.
If the seller refuses to do the work, it probably means he or she is hard-up and needs to move fast. ’This tells the buyer that they’ve room to negotiate hard,’ says Mark Parkinson of Middleton Advisors, another buying agency. Negotiate hard is exactly what public relations consultant Lana Wilson did when she bought a four-bedroom Victorian end-of-terrace house in Hackney, London, in February. ’I short-listed three streets in Hackney where I wanted to live, and as a house there came on the market I checked its historic prices with Land Registry data. Then I spoke with different agents to see if they thought the price was fair,’ she says. She viewed each property, finally putting in an offer on one home that was well below its 900,000 asking price. ’My offer was rejected so I just walked away and didn’t try to negotiate. Two months later the estate agent came back and said the vendors were interested. But by that time prices had fallen further, so I recognised the sellers were probably desperate to move. I finally got it for
750,000, which was only a little more than it sold for several years ago,’ she says. Wilson also did two things that are considered critical in securing a lower-than-expected purchase price – she researched nearby sales and sorted out her finances so she could faithfully tell the seller she was ready to move quickly.
Websites such as mouseprice.com and houseprices.co.uk show recent local sales, providing hard evidence to show an estate agent and seller when you make a bid. ’Vendors would much rather accept an offer from a credible bid than someone just throwing in a low offer with no research,’ says Philip Selway of The Buying Solution.