DIY Relocation Part 3 – Negotiating the deal
So you’ve found a school, and been to view your perfect home but how do you make it yours? Negotiating can be difficult if you don’t know what you’re doing – and even harder if there are other people interested in the property too. The third article in our DIY Relocation series tells you to get a good deal:
It will be the lettings/estate agent with whom you will be negotiating. Some are more personable than others, and it certainly helps if you can build up a rapport before you get to the negotiation stage on a property. Don’t forget agents are usually paid a percentage commission by their clients (landlords as well as vendors), and will therefore have a vested interest in getting the best possible price, so they may be pushy. Don’t be intimidated – if you walk away they get nothing, but if they concede on price they still have a deal. Having a handle on what the agent is like prior to entering into negotiations can give you a head start so ask them lots of questions during viewings.
Be aware of your own attractiveness – focus on your strengths:
- Can you afford and/or will you be happy to pay asking price?
- Timing: Landlords don’t want their properties empty – can you be flexible with your move-in date?
- If you’re buying, you need to be in a proceedable position:
- Are you a cash buyer or have you already got a mortgage agreed?
- Have you sold your existing property to someone who is also in a proceedable position?
- If you’re renting:
- How long can you sign up for? Generally the longer the term, the stronger position you will find yourself in.
- Do you really need a break clause? If so, the later it kicks in, the better. Choose your break clause carefully, and be prepared to concede – the landlord will probably favour them in the following order:
- Business Break Clause – this allows you to exit the tenancy if your work place or situation changes
- Reciprocal Break Clause – this allows both you and the landlord to exit the tenancy
- Tenant Only Break Clause – this allows only the tenant to exit the tenancy
- Can you compromise on furniture? If you can take the property as it is when you view it, it will usually be the most attractive option to the landlord. If you want to change, add or remove any furniture, expect to compensate for this in the rental figure.
- Can you pay a lump sum up front? Quarterly up front rental payments will be very attractive to a landlord.
- Do you have a good credit rating? If not you’ll either need a guarantor or expect to pay rent for the entire term up front.
How much is the property really worth?
A property is only worth as much as someone is willing to pay for it. Do your homework, find out what level comparable properties are priced at. Check the property portals to discover what neighbouring properties have sold for:
If you like a particular property disproportionately to anything else you’ve seen, chances are other people who view it will think the same thing, and competition for property is what pushes up prices. Talk to agents about how long properties have been on the market for, and what the landlords’/vendors’ situations are – this will give you an idea of how much room there is for negotiation on price.
Does it need work?
Is the property exactly as you want it, or is there anything you’d like to change?
For rental properties, it is usual to incorporate any upgrades to the property in the terms of the offer you put forward. If you don’t like the colour of the walls, or you want the carpet to be replaced, now is the time to say so, and once it’s agreed make sure it is written into the contract. If you’re buying, take into account any work which will need to be done in order to bring the property up to the standard you want – any structural or aesthetic upgrades can be expensive, and things like these need to be incorporated when ascertaining the real value of a property.
Be prepared to walk away:
You’ll get a much better deal if you don’t get too attached to a property. If you can, have a couple of possible properties in mind and play one off against the other to get the best deal. Be honest about what you are doing though – agents don’t take kindly to being misled or lied to!
If you do get attached to a property, the trick is to make it as easy as possible for the landlord or vendor to say yes. Throwing as much money as possible at it is always useful, but depending on your situation this might not be necessary (see ‘be aware of your own attractiveness – focus on your strengths’, above). Above all, have in mind the top price you would pay and don’t go above it.
Things to be aware of:
- If you’re purchasing a property, the agent is legally obliged to pass on the details of any offer you put forward to the landlord
- If you’re renting, be aware of your landlord’s position: Professional landlords (those with a portfolio of properties) are usually only interested in a good quality tenant with job security who will sign a long lease, whereas an accidental landlord (someone who is letting their own property because they are unable to sell for example) would often be more inclined to simply accept the highest financial offer
Dealing with the paperwork:
A conveyancing solicitor will deal with everything involved with a purchase for you. For a rental property, you will need to pass referencing, and a tenancy agreement will be drawn up by the agent. There are many things to be aware of regarding tenancy agreements and our articles on Types of Private Tenancies, What is a Tenancy Agreement?, and Tenancies – A-Z of Terms will give you a starter for ten. The next in our series of DIY Relocation will discuss the things to look out for in a tenancy agreement.
If you have any further questions, either email us or visit our Facebook page:http://www.facebook.com/executiverelocationplus and post them on our wall.