Can I negotiate the purchase price of a flat?

The art of negotiation: strategies and facts

Analysing the starting position: buyer's or seller's market?

Before you enter into price negotiations when buying a flat, you need to know the balance of power.

• Seller's market (hotspots): In sought-after urban locations, there are often 50 interested parties for a flat. In this case, classic price negotiation when buying a flat is usually impossible. On the contrary: often, a bidding process begins.
• Buyer's market (periphery/luxury segment): Has a property been vacant for more than three or four months? Is it located in a structurally weak region? If so, you have the best chance of negotiating the price when buying a flat.

Preparation is everything: the valuation

Never go into price negotiations for a flat purchase unprepared. Your strongest ally is the bank. When you apply for financing, the bank will value the property (hedonic estimation).

• The scenario: the seller wants £1.2 million. However, your bank values the property at only £1.0 million.
• Your argument: this is the perfect leverage for price negotiations when buying a flat. You can show the seller in black and white that the market price is lower and that you (and any other buyer!) would have to contribute the difference of £200,000 as equity. This massively reduces the pool of potential buyers and strengthens your position in price negotiations when buying a flat.

Hard facts: the investment backlog

The most effective argument in any price negotiation when buying a flat is the condition of the property. A layman's view is not enough here. Take a building surveyor with you for a second viewing.

Make a list of the necessary investments:

• Does the oil heating system need to be removed soon (legal requirement)?
• Are the windows draughty?
• Is the roof due for renovation?
• Is there asbestos in the building?

These defects are worth cash. When negotiating the price of a flat purchase, you can deduct these costs directly from the asking price. Argue objectively: "The price of X would be fair for a renovated flat. However, as we need to invest £50,000 in the roof immediately, we consider Y to be the fair market value." A well-founded list of defects is the key to successful price negotiations when buying a flat.

Psychology and tactics: how should I behave?

Negotiating the price of a flat is not like haggling at a bazaar. In Switzerland, objectivity and politeness are valued. Aggressive bargaining ("What's your final price?") often leads to the negotiations breaking down.

• Respect: show appreciation for the property. If you only speak badly of it, the seller will become emotionally blocked. Successful price negotiations when buying a flat build bridges.
• The written offer: Make your offer in writing. Justify your price with the bank valuation and renovation costs. This comes across as binding and professional. A written dossier gives weight to your price negotiation when buying a flat.
• Proof of financing: Be sure to include confirmation of financing from the bank with your offer. In price negotiations when buying a flat, a seller would rather accept a slightly lower price from a secure buyer than a high bid from someone who may not be able to pay.

The opposite: the bidding process

In Zurich or Geneva, price negotiations for apartment purchases often work the other way around. The advertised price is only the starting bid.

If the estate agent says, "We have several offers above the guide price," you have to decide whether to go along with it. Here, too, rationality is important. Price negotiations for apartment purchases should never exceed your budget limit. Don't let yourself be driven by the "fear of missing out" (FOMO). A successful price negotiation for an apartment purchase that ruins you financially is a loss.

Cultural aspects for newcomers

Newcomers should know that Swiss people don't like to talk about money. Price negotiations for flat purchases are conducted discreetly here. You name a figure, justify it well and wait. The constant back and forth that is common in other cultures is rather unusual in price negotiations for flat purchases in this country. People often meet in the middle ("split the difference"), but usually in just a few steps.

Think of price negotiations when buying a flat as a business transaction between partners, not as a battle.

Typical mistakes in price negotiations when buying a flat

Avoid these pitfalls if you want to be successful:

• Negotiating too early: Do not start price negotiations when viewing the property for the first time. This comes across as unprofessional.
• Not having a limit: Set your absolute limit before negotiating the price of a flat purchase.
• Showing emotion: If the seller notices that you really want the property, you have almost lost the price negotiation. Stay cool.
• Unrealistic demands: A 30% discount is unrealistic in the Swiss market (except for ruins). Anyone who goes into price negotiations with fantasy figures will be rejected.

Conclusion

The answer is: yes, you can and should negotiate – but with a sense of proportion. Price negotiations when buying a flat are certainly possible in Switzerland if you have the right arguments. In rural areas or for properties in need of renovation, the potential is often 5 to 10 per cent, sometimes more. In hot markets, price negotiations for flat purchases tend to be more about securing the sale at all, often at or above the list price.

The key to success in any price negotiation when buying a flat is preparation. Know the market value, know the defects and know your budget. If you go into price negotiations when buying a flat well prepared and with proof of financing, you will be taken seriously.

Utilise Loft's expertise to analyse your market position and find the right arguments for your dream property.

Glossary

• Price negotiation when buying a flat: The process of agreeing on a final purchase price between the buyer and seller, based on market analysis and the condition of the property.
• Market value: The objective value of the property as determined by the bank or an expert. It is the most important basis for any price negotiation when buying a flat.
• Investment backlog: Deferred repairs (e.g. old roof, heating). These costs are the strongest argument for lowering the price in a price negotiation when buying a flat.
• Bidding process: A form of price negotiation when buying a flat in which interested parties submit bids and the price usually rises above the asking price.
• Proof of financing: Confirmation from the bank of the buyer's creditworthiness. A decisive trump card in any price negotiation when buying a flat.