Current Market Challenges and Changes

The situation in 2023 looks completely different and I’ve had to adjust my advice to clients accordingly. I’ve been helping families navigate through what feels like a perfect storm of challenges. The cost of living crisis has hit hard – just last week, I sat with a couple who had to completely recalculate their budget because their monthly expenses had increased by £400 due to rising energy costs. We’re dealing with the highest inflation since 1981 and when we entered a recession in November 2022, I saw many of my clients put their moving plans on hold. The base rate reaching 3.5% by the end of 2022 was particularly challenging – I had several clients who had to revise their property searches to account for higher mortgage payments.

The Growing Rental Crisis

The rental market has become particularly tough and I’m seeing this impact firsthand. Recently, I worked with a young professional who was paying £1,200 monthly in rent – nearly a quarter of their income – making it incredibly difficult to save for a deposit. The statistics show that renters now spend 24% of their weekly expenditure on housing costs, compared to homeowners who spend 16% on their mortgages. This gap is the largest I’ve seen in my career and it’s creating a real barrier for first-time buyers.

The Silver Lining: More Choice for Buyers

There is a silver lining though – the market is shifting to favor buyers. On Boxing Day 2022, Rightmove reported a 46% year-on-year increase in new listings. This matches what I’m seeing in my daily work – my property database has nearly doubled in size, giving buyers more options than they’ve had in years. This increased choice means buyers can now take their time to find the right property at the right price, rather than feeling pressured to make quick decisions.

What Does This Mean for Buyers Who Are Also Selling a Home?

From my recent experience, I’ve noticed some interesting trends. Last month, I worked with a family who needed to sell their three-bedroom semi-detached house to upgrade to a larger property. Initially, they were disappointed when they had to reduce their asking price by £15,000 to secure a sale. However, we then used this market knowledge to negotiate £25,000 off their purchase price for their new home, actually leaving them better off overall. This is becoming a common pattern – what you might lose on the sale, you can often make up for in the purchase.

I always reassure my clients about the long-term perspective. When discussing potential price drops of 2-10% in 2023, I share historical data showing the impressive 974% increase in house prices since 1983. Just recently, I helped a couple who were worried about buying in the current market. I showed them how similar dips had occurred before, yet the market had always recovered. The projected 18% growth by 2027 is particularly encouraging and I’ve been using this to help clients make informed decisions about their timing.

Those worrying about losing equity in their homes thanks to predictions of a drop in house prices of between 2% and 10% for 2023 should rest assured that in the long term house prices will recover. Despite a number of economic downturns over the last 40 years, house prices have still soared an impressive 974% overall since 1983. Indeed, house prices are expected to recover in 2024 and grow again by 18% overall by 2027.    

So, How Should You Go About Haggling Then? 

Based on my daily experience negotiating deals, preparation is absolutely crucial. Last week, I helped a buyer secure a property for £20,000 below asking price because we had all our paperwork ready to go. This included a mortgage agreement in principle, proof of deposit and a solicitor already lined up. The seller chose our offer over a higher one simply because we were better prepared and could move quickly.

I’ve also seen great success with buyers who can be flexible with their moving timeline. Recently, I worked with a client who was willing to move into temporary accommodation to accommodate a seller’s delayed completion date. This flexibility secured them a £15,000 reduction on the asking price, even though they weren’t the highest bidder.

When it comes to research, I always tell my clients to look beyond the asking prices. In one recent case, I helped a buyer analyze sold prices in their target area and discovered that properties were typically selling for 5-8% below asking price. Armed with this information, we made a confident offer that was accepted, saving them significant money.

At The End

When to Walk Away and When to Compromise

Drawing from my years of experience, I’ve learned that walking away can be your strongest negotiating tool. Just last month, I advised a client to walk away from a property when the seller wouldn’t budge on price. Two weeks later, the seller came back accepting our original offer. However, I also remind clients not to let pride get in the way of a good deal. One of my recent clients almost lost their dream home over a £2,000 difference – we had to have a serious conversation about whether that relatively small amount was worth losing a property that met all their needs.

Using Surveys to Your Advantage

Remember, surveyor findings can provide another opportunity for negotiation. In a recent case, we discovered some issues with the roof during the survey, which allowed us to negotiate a further £7,000 reduction to cover the repair costs. This is why I always emphasize that initial offers aren’t set in stone until contracts are exchanged.

Online Estate Agents

An online estate agent’s main bulk of operations happens online. Although they might have a headquarters, they don’t tend to have a number of different locations which are accessible to the public. Instead of being listed at different locations, the properties are all listed online. Potential buyers can peruse them at their own leisure, using the sites to organize viewings and even be directed to mortgage providers. The question then becomes why should you – as a buyer – choose to use an online estate agent over a more traditional option? The biggest attraction, admittedly, for both buyers and sellers is the low cost. They tend to take less commission or some even charge a flat fee which is important if your seller plans to include these costs in the price of the property. 

In addition to this, there are also obviously no opening hours to consider; you can look at the property listings whenever you have the time, including evenings and weekends when traditional real estate agents might be closed. Obviously, any enquiries or viewing requests are likely to have to wait until people are there to answer them. Convenience and ease are arguably two of the biggest advantages. Depending on the online estate agents too, you can find comprehensive listings which detail the amount that you can expect to pay each month, as well as an exploration of the local area and the amenities that you can expect. EZ Home Search can help with this because all of their listings include links to google maps, which then allow you to explore the street view of each property as well as the surrounding area. 

That being said, depending on where the headquarters for the business is, you might miss the intricate local knowledge of the area that a traditional real estate agent can provide. There is also very little standardization across the industry, meaning that fees can vary and the approach to viewings and the house-buying process might be handled differently, too. You also lack the personal touch overall because you are taking charge of your own house-buying venture and there isn’t anyone helping to find listings or otherwise minimize your involvement in the process. You need to be fully involved and committed, which can be tiring and cumbersome for some people. 

Real Estate Agents

Most people know what a real estate agent is. It is a qualified person who often works for a business, although they may work for themselves, who is hired by a seller to sell their home. Buyers can approach a real estate agent, outlining their needs in terms of the size of the house and the features that they are looking for; the estate agent then goes through their listings to find properties that fit these specifications. Obviously, if they sell a house, a real estate agent expects a commission, sometimes in addition to their other fees, which can be pricey depending on the cost of the home, so a lot of sellers account for this in the price of their home. They might also state in the contract that the buyer is responsible for these fees. Real estate agents are often more expensive than online estate agents. 

However, there are a number of benefits to choosing to use a real estate agent. Firstly, it can save you a lot of time because they work on your behalf, as opposed to you having to do the legwork, which can be convenient, especially if you have several other responsibilities which require your time and attention. Your real estate agent is also likely to be more versed in the art of negotiation, which can mean that they can go to bat for you to help you secure the best possible price. This is also possible thanks to their intimate knowledge of the local property market, which informs the negotiations and tells them how much they can haggle using the average price of homes in the area. Lastly, depending on who you choose, they might be able to offer you some help and expertise when it comes to the contracts and legal requirements. 

However, there are also a few disadvantages to choosing a real estate agent over an online estate agent. Firstly, they have more than one client meaning that their attention is always going to be divided, which can slow down the process for you when compared to using an online estate agent, which goes as fast as you do since you’re the one looking through the listings and booking viewings. As mentioned above, there is also the commission to contend with. They also often act as the middleman between you and the seller, which can further delay answers to queries or the relaying of messages. Working to someone else’s schedule can also be irritating. 

How Do You Choose?

When it comes to choosing between an online estate agent and a traditional real estate agent, it will largely depend on your personal preferences and circumstances. There are both advantages and disadvantages to both options, which is why it comes down to the individual. You will need to think about your other obligations and responsibilities, which will inform whether or not you have the time to liaise with a traditional real estate agent or whether using an online estate agent in your own time will be the best option. Think about whether or not you want to hand off the tasks to another person or perhaps involving a real estate agent as a middleman is going to delay the process for you, which may not be ideal should you have a stringent timeline. Regardless of the option that you choose, doing some research is imperative. You need to find the right person or site to work with. 

The Bottom Line

Buying a home is a huge financial decision whether you are a first-time buyer or planning to move up the property ladder. The process itself can be long and tiring, requiring a lot of mental attention until the process is complete. It can be incredibly stressful, too; this stress can be lessened by your choice of estate agent; depending on whether you choose a traditional real estate agent or an online estate agent, the process might be made less stressful. This is because you can hand off a lot of the work to an estate agent if you choose and they handle most things for you or if you have trouble relinquishing control, then you might want to take the reins and use an online estate agent. Obviously, in the end, it is your choice, so bear in mind the points raised above when it comes to making your decision.