Brits are at risk of paying over the odds on their house purchases because they are fearful of negotiating on the price, research by Barclays Mortgages has revealed.
The lender is offering tips to potential buyers on the art of bargaining after its research found nearly a third of homeowners did not negotiate at all on the price of their current property.
Indeed, Barclays thinks the stumbling block for many was simply a lack of knowledge, with over one in five Brits (22%) confessing they just didn’t know how to negotiate.
The research revealed homeowners aged 25 to 34 experienced the most anxiety or stress when negotiating, compared to those aged 65+ who were far more comfortable with the process and therefore found it the least stressful.
But the anxiety experienced by the 25 to 34-year olds came at a cost, with more than a third (35%) of homeowners in this age group saying 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 included fear of losing the property, fatigue at the process of buying and just wanting it over or finding negotiating embarrassing. Others found the process of negotiation intimidating or scary while others did not want to upset the seller.
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.”
House price negotiation tips
Smith offered some top tips to help homebuyers who felt they were in a position to negotiate but felt daunted by the prospect.
- 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 the 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.
