How to negotiate with letting agents
You’re moving house and are just about to embark on your first few viewings. You’re keen to find somewhere good, and quickly - but this doesn’t mean you have to settle for somewhere that's not good value too.
Here are some inside tips from a former lettings agent on how to successfully negotiate your lettings contract.
1. Never offer too far below the asking price
Unless from your research you think the property is ridiculously overpriced, don’t annoy the agent by offering an amount you know is unreasonably low. Offer less than you’re prepared to pay, but still around what you think is reasonable for the property.
2. Landlords want good renters
Most properties are probably an investment from buy-to-let buyers that will have a mortgage to pay on their purchase. The owner of the property wants to look after their investment and pay the mortgage off, so will want to quickly find renters who are going to take care of the property and pay on time.
If you view a great property that’s recently come onto the market then it would be a shame not to at least try to offer less than the asking price to move in immediately, especially if you’re a good renter with good references a ready deposit and regular income.
3. When did the property become available?
Check the portals to see if you can find out when properties were “first added” on. If it was over 3 weeks ago, chances are there could be something wrong with it, it’s overpriced or not in great condition, especially if it’s listed as “recently reduced”.
You can tell the agent that there a quite a few flats in the area in much better condition, but not in such a good location, but that you’d be willing to negotiate on price.
4. How many agencies is the property with?
Some properties go on the market on a "multi-agency" basis. This means that more than one agency has the property on their books. If this is the case with the property that you’re viewing then you know the owner is probably in a particular rush to find renters, or is worried that they won’t.
If this is the case, you’re in a stronger position to negotiate on the rent.
5. Pay in advance
If you can afford it, offer to pay a large advance on your rent but at a reduced price. This means the landlord can pay any builders or contractors they might owe money, especially if it's a newly refurbed flat. It also means they get their rent in one chunk and the landlord doesn't need to check their bank balance every month, which is one less thing on their mind.
6. Get rid of the break clause
If you take a property without a break-clause the agent will usually get a bigger commission, so you can get away with offering less per month for rent. You should still be able to activate a break clause (most contracts have terms in which you can leave a property during the fixed term if certain conditions are met - just make sure you check the contract) and still get your reduction.
For example, if the rent is £1,600 pcm for a 12 month contract with a 6 month break clause, then offer to pay £1,500 pcm for a 12 month contract with no break clause.
7. How to act during a viewing
When viewing the flat, don't say "Oh my, I love it!" - the agent has you in the palm of his hand and may try to get you to pay over the odds for it.
Instead, point out the niggly things that you’re not sure about, and emphasise them.
"My partner won't be impressed ...", "... this room is too small ...", "... it's quite far from the tube ...", ".. this window sill is filthy...", "... what will the landlord do about the conditions of this carpet..?"
The agent probably knows all this as well and the feedback they get on a property will get forwarded onto the landlord too. Tell the agent that you're viewing a few other properties tonight and tomorrow morning... avoid a phone call from the estate agent the next morning but call back a few hours later with an offer. They may do a deal, chances are other people have noticed the same thing.
“You know what... I'll take it if and only if I pay £300 instead of £330" (for example).
Remember to sound confident and be prepared for the agent not to accept your first offer. Don’t immediately backtrack if they tell you it might be hard to negotiate a deal.
8. Say you’ve got other options
Another thing you can try is letting the agent know you’ve got other options:
Agent: "If you can come up another £10 a month, and the flat is yours?"
Agent: "Even a fiver?"
You: "No. I'm waiting to hear back about an offer I've made on another flat. This is my first choice though, so if you can get me the price I’ve asked for I'll take it."
9. Reduced fees
Also remember that an agency can reduce their fees significantly to beat another agency to a deal. If you can play one agency against another that represents the same property by explaining that you’ll just try and do a deal with them instead, they may be willing to budge. There's nothing worse than doing all the work for your applicant to simply go next door and pay deposits when the other agency did no work.
Feature image credit: Barney Moss