Spring is a popular time to start looking for a new home but a mortgage is warning of a question asked by some estate agents
Buying a home is one of the biggest financial commitments most people will ever make. With many costing hundreds of thousands of pounds most people are trying to get their new property for as little as possible.
But according to one mortgage expert, many buyers might be unknowingly weakening their negotiating position by agreeing to a request made by some estate agents during the offer process. When you put forward an offer on a property, you may be encouraged to speak to the estate agents or a mortgage broker before the offer is progressed.
But mortgage expert David Sampson, from the HMO Mortgage Broker, says while this may seem like a routine step, it can work against you when it comes to negotiations. And he warned buyers should be cautious about how much financial information they share at this stage.
He says: “Estate agents work for the seller and not for the buyer, and their goal is to achieve the highest possible price, and knowing how much a buyer can afford can influence negotiations.” He says conversations with an in-house broker may seem convenient, but they can be used to assess your maximum affordability rather than confirm that funding is in place.
David adds: “If an agent knows you can afford £300,000, but you are offering £290,000 or under the asking price, that information doesn’t help you. It tells the seller that there’s room to push, even if you have no intention of offering more.”
You may feel the need to go with an in-house broker, or you may even be pressured into doing so because you feel it may harm your chances, especially in competitive markets, but it doesn’t. David says: “You aren’t obligated to use the estate agent’s broker, and you are allowed to have your own broker and your own decision in principle.
“If you show a mortgage in principle which shows you can afford more, while you are offering less than the asking price, you can expect counteroffers right away, and these can add up quickly.”
He shares another tip that can save you thousands is to only get a decision in principle for the offer that you are making. David says this isn’t about being difficult or deceitful, this is about protecting your position and not oversharing information that will be used against you.
He explains: “Using your own broker and submitting a decision in principle that doesn’t give anything away can make a meaningful difference when purchasing your home.”
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