However, according to one mortgage specialist, many purchasers may be inadvertently undermining their bargaining power by complying with a request from some estate agents during the offer stage. When submitting an offer on a property, you might be asked to have a conversation with the estate agent or a mortgage broker before your bid is taken forward.
Yet mortgage specialist David Sampson, from the HMO Mortgage Broker, suggests that whilst this may appear to be standard procedure, it could actually disadvantage you during price negotiations. He cautioned that buyers ought to be careful about the extent of financial details they disclose at this point.
He explains: « 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 notes that discussions with an in-house adviser might appear straightforward, but they can be utilised to determine your maximum budget rather than simply verify that financing is secured.
David continues: « 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 might feel compelled to work with an in-house broker, or perhaps pressured into it over concerns it could jeopardise your prospects, particularly in competitive markets, but that’s not the case. David explains: « 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 offers another money-saving tip: only obtain a decision in principle for the amount you’re actually offering. David emphasises this isn’t about being awkward or dishonest, but rather safeguarding your negotiating position and avoiding revealing information that could work against you.
He adds: « 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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