How to Negotiate a Property Price as an Investor
February 28, 2023
Negotiating a property price is one of the few parts of investing where your preparation and conversation can directly change what you pay. You can’t ring an index fund and ask for a discount because you’re ready to buy. With a house, you can make an offer, explain your position and find out whether it solves the seller’s problem.
That doesn’t mean every low offer is a good offer, or that a reduction from the asking price creates instant profit. The property needs to be worth what you think it’s worth. You also need to be able to complete, cover the costs and make the investment work after you’ve bought it.
In my February 2023 video, I explained the process I use: understand the seller’s circumstances, work out what you can offer besides price, then put forward a number that makes sense for your investment. Here’s how I’d approach that conversation.
You can watch my original property negotiation video for the examples behind this article.
Understand what the discount really means
I used a simple illustration in the video. Imagine a house genuinely worth £100,000 that you buy for £80,000. There’s a £20,000 difference between the purchase price and the assumed market value.
That’s potential equity, not £20,000 arriving in your bank account. Buying costs reduce the economic benefit, the valuation needs to be supported, and a future lender may not agree with your assessment. Selling it would also involve costs and potentially tax.
This distinction matters because a property advertised at £100,000 isn’t automatically worth £100,000. If comparable houses sell for £80,000, paying £80,000 may simply mean paying the going rate. The negotiation only helps if the final price is attractive relative to the property’s real condition and market.
Before I get excited about the percentage reduction, I want to understand what I’m buying. My article on property price versus market value goes into that difference in more detail.
Look for a reason the seller values your offer
A seller who is happy to wait indefinitely has little reason to accept a substantial discount. Someone with a particular problem may value a different combination of price, timing and certainty.
In the video, I described looking at a flat that had been on the market for several months. A buyer had pulled out, the price had recently been reduced and the seller was moving abroad. Those details suggested a conversation worth having. They didn’t prove that a low offer would be accepted.
Useful questions include how long the property has been available, whether a sale has fallen through and what timescale the seller would prefer. The answers help you understand the situation without inventing a story about somebody being desperate.
I want to offer a workable solution. That means being respectful about personal circumstances and straightforward about my own position. Pressuring somebody isn’t a substitute for presenting a credible offer.
Speed is useful only when the seller wants speed
It’s easy to assume that every seller wants the fastest possible completion. Sometimes they do. Sometimes they need the sale to fit a purchase, a move or another commitment.
If you understand that timing, you can make your offer more relevant. A buyer who can be flexible may be more useful than one who insists on completing immediately, even if both offer the same money.
The important word is “can”. Don’t promise a cash purchase if you’re relying on a mortgage, or a completion date that your solicitor hasn’t assessed. An attractive story that collapses during conveyancing doesn’t help anyone.
I want the agent and seller to know what I’m genuinely able to do. Proof of funds, an organised solicitor and clarity about finance are much more persuasive than simply saying I’m a serious investor.
What happened with my French house
My French property was a useful example of patience. In the video, I recalled an asking price of about €175,000 and an offer of €115,000. The offer was rejected, and I walked away rather than increasing it beyond what I could afford.
Around six months later, the agent contacted me because the seller’s circumstances had changed and she wanted to sell. My offer was still available. I eventually bought the eight-bedroom property for €115,000, with a favourable exchange-rate movement bringing the sterling cost to roughly £80,000.
That was a particular transaction in a different market and period. It wasn’t a formula for obtaining a similar discount on a UK property today. The exchange-rate benefit wasn’t something I created through negotiating skill, either.
The practical lesson is simpler: an offer that is declined today may become relevant later. Staying polite and leaving the conversation open costs very little, provided you reassess the property and your finances before committing months afterwards.
Make the first conversation easy to have
People sometimes avoid making an offer because they’re worried about offending the agent or seller. I don’t think there’s anything wrong with explaining that you’re buying as an investment and need the numbers to work.
I’d start by understanding the property, then explain the broad level at which it would make sense for me. Instead of making a theatrical demand, I’d ask whether the seller might consider an offer around that figure from a buyer in my position.
That gives the agent something to respond to. They may say it’s unrealistic, explain a minimum expectation or suggest another property whose seller is more flexible. Any of those answers can be useful information.
I’d support the number with relevant comparisons and the work required. “I want a bargain” isn’t much of an explanation. A clear account of price, condition, likely costs and my ability to proceed makes the conversation more constructive.
Set your limit before the negotiation starts
A good negotiation can still produce a bad investment if you get carried away. I’d rather decide my maximum price before becoming emotionally attached to the outcome.
That limit needs to include more than the deposit. Allow for tax, legal work, mortgage costs, any renovation, letting costs and a reserve. Then assess the rent and ongoing expenses at the price you’re considering.
If a seller moves down £5,000 but the deal still doesn’t work, the reduction hasn’t solved the problem. Equally, refusing a sound investment over a small difference can be unhelpful if your original limit was arbitrary rather than calculated.
The point is to know why your number is your number. That makes it easier to negotiate calmly, and much easier to walk away when the conversation goes beyond what the investment can support.
Treat percentage targets as targets, not promises
In February 2023, I talked about looking for discounts of roughly 10–20% in the market conditions I was seeing. I also said that the larger reductions were unusual and that previous, more buoyant markets had made negotiation much harder.
Those were observations from that period. They aren’t a claim that every property can be bought 20% below market value, or that a particular discount is necessary for every strategy.
A reduction from an inflated asking price can be meaningless. A smaller reduction on a well-priced property may be more useful. The quality of the underlying evidence matters more than winning a percentage comparison.
I’d also avoid assuming that a discount protects against every future loss. Prices can fall, repairs can cost more than expected, and financing conditions can change. Buying well improves your starting position; it doesn’t remove the risks of owning the property.
Keep refinancing separate from the purchase negotiation
The video included an example of someone buying a property for much less than its assessed value and later refinancing after further growth. That’s one reason negotiated purchases can help a portfolio develop.
But the future refinance is a separate decision. It depends on the lender’s valuation, lending criteria, rent cover, your circumstances and the cost of the new borrowing. It shouldn’t be treated as money you’re certain to receive just because you’ve secured a low price.
If you release capital, you’ve generally replaced some of your equity with additional debt. The property hasn’t become free of obligations. The interest, fees and repayment arrangements still matter.
I’d want the purchase to be supportable even if the refinance is smaller or later than hoped. That leaves you making a decision from a stronger position rather than relying on a perfect sequence of events.
Be the buyer who follows through
Before the pandemic, we developed relationships with agents who knew the sorts of deals we would buy. Sometimes they contacted us when a sale fell through because they knew we were organised and could assess an opportunity quickly.
That reputation came from behaviour. We needed the paperwork in order, the funds available and the ability to do what we’d said. It wasn’t enough to make lots of offers and then disappear when one was accepted.
In England and Wales, an accepted offer ordinarily isn’t legally binding until contracts are exchanged. The government’s guidance on making an offer explains the process. Scotland has a different system, so use advice appropriate to the property’s location.
Keep your solicitor involved and don’t confuse enthusiasm with legal certainty. A survey, searches, title checks and a mortgage offer can all reveal issues that need resolving before you’re ready to exchange.
A good deal works for your investment and the seller’s situation
My approach is to find out what matters, establish a price I can justify and make an offer I can deliver. Sometimes the answer will be no. Sometimes a different opportunity will emerge from the same conversation.
The skill isn’t simply asking for less. It’s understanding the transaction well enough to know when a lower price creates value, when another term matters more and when the sensible decision is to leave it alone.
If you’d like to discuss how you’d assess your next purchase, book a free 30-minute call. For more support, you can explore the Starter Club or find out about Done For You.