Most vendors (property sellers) hire agents to sell their homes – and everyone knows that advertising costs a lot. What not everyone knows (or often forgets) is, that vendors transfer the advertising costs on to the buyers. Yes, that’s true – the asking price for the house is usually worked out this way:
Asking price = the price vendor is hoping to achieve + real estate agent’s fee.
Here is a real-life example – I was considering a house that was advertised for 295K. It so happened that I was able to speak to the vendor directly. So I made him an offer and he told me –”Well, that’s too low, I am looking to get 290K”. When I checked to see how much was the estate agency fee, guess what I heard – 5K, what a surprise.
So I’d say it makes sense before you start negotiating, work out what the real asking price for that property is. Find out how much the advertising real estate agency charges the sellers and subtract that from the asking price. The reason here is – when you make an offer and it is below the asking price but very close to the value of the house, the vendor is more likely to accept your offer.