Paying a fair asking price

Q: How can I make sure I’m paying a fair asking price?

A: First of all, what is an asking price? Exactly that: a price that a seller, or their estate agent, is asking. When purchasing a property, buyers can focus heavily on the asking price and this is something I would strongly advise against. There are many different pricing strategies when marketing a property. Some properties are priced in line with market values, with a view of it selling at the asking price, but other times it can be a number plucked out of thin air by an overly optimistic seller (or an estate agent keen to win the instruction!).

There have been many statistics recently published which are claiming an increase in London house prices, following the election result in May. From my experience over the past month, however, it’s not so much prices rising themselves; it’s been sellers’ expectations which have been rising. Many sellers were expecting a boom in prices post-election, with some even increasing their asking prices off the back of it. However, with prices already high before the election, plus increased stamp duty costs at the higher end of the market, many buyers aren’t biting.

We are therefore seeing a lot of situations where there is a gap between the sale price and what the property is worth or what buyers are prepared to pay. That gap will eventually close over time, but if you’re looking to buy in the meantime, keep this in the back of your mind. Don’t be afraid to make a low offer as you never know if a seller’s ego might be slightly bruised and open to negotiation.

If you are making a low offer, make sure you present yourself in the best possible light you can. Firstly, find out as much as you can about the seller’s situation as you can use to your advantage. For example, if you know the seller wants a longer time scale to move out and you can accommodate this, play heavily on this point when putting forward your offer. Also give as much information about your buying position and include personal information as well such as what you do for a living, why you want to live in the area and so on. It can make a real difference to how the seller perceives you.

If you have a question you’d like Jo to answer please email enquire@eccord.com or tweet her @joeccles.