Estate agents and private individuals are selling fewer houses than last year. This ensures that buyers can negotiate the price of a home again. Which properties can you offer below the asking price? And what arguments can you give for that? Real estate expert Bea Vandendael and civil-law notary Bart van Opstal reveal the best approach for such a negotiation.
How is the real estate market doing today?
“There have been fewer transactions in recent months,” says notary Bart van Opstal, spokesman for Notaris.be. “We see a decline of 14 percent in Flanders.
During the first half of last year there was a very high demand for real estate. There were two main groups of buyers: investors who saw rents rise, and young people who took advantage of cheaper loans to make a first purchase. Those two groups were bidding against each other, and that is very exceptional. You only experience a situation like this once in twenty years. The question then was not: ‘How much can we bid lower?’, but ‘How much should we bid above the asking price?’. This competition between buyers resulted in major price increases.”
The situation turned around at the beginning of 2023. “Interest rates increased, resulting in fewer young buyers entering the market,” Bart van Opstal continues. “In addition, the high inflation makes investors doubtful. Investors are looking more at alternatives, such as savings certificates. We are returning to a more normal market equilibrium with fewer buyers.” This ensures greater purchasing comfort than last year.
“Properties are once again on the market for longer, giving a buyer more time to visit the home. Even several visits, with family or a contractor, are possible again. Last year you had perhaps fifteen minutes to look around before you were asked to make a major financial commitment. That is not enough time to discover any problems.”
How do you know if you can negotiate the asking price?
“There are three main arguments for making a lower offer, up to an average of 15 percent lower than the asking price. You need to know those arguments,” says real estate expert Bea Vandendael.
“A very important one is the EPC label that reflects the energy performance of the home. The renovation obligation states that you must renovate a house with an EPC lower than D within five years, so that it receives at least a D label. With a home with an E or F label, you know in advance that there will be additional costs. That influences the asking price and makes negotiation possible.”
Bart van Opstal adds: “In 2050, every home must have an A label. If supply and demand remain as they are now, homes with good EPC labels will become more expensive in the coming years. Buyers will be more critical of bad EPC labels and that will put even more pressure on the price.”
The asbestos certificate also plays a role. “Since November 23, every home that comes on the market must be examined for the presence of hazardous asbestos,” explains Bea Vandendael. “If a specialized company has to remove dangerous asbestos, or if you cannot install solar panels in a roof because of asbestos, that will lower the asking price. A year ago this was not the case. Moreover, no one can predict how much a thorough renovation will cost. That depends, among other things, on interest rates and the price of building materials.”
A third argument, according to Vandendael, is the higher insurance premium for a home in a flood zone.
What amounts are concerned?
What amount do you deduct from the asking price when you make an offer? This differs from building to building. Bart van Opstal: “On average, you can try to do 10 percent of the asking price with those arguments. For costs of which you are already certain, you make an addition. For example, to make an electrical installation in accordance with the standard, you expect an average of 5,000 to 10,000 euros. You can easily pay 10,000 euros for double glazing, and 5,000 to 6,000 euros for a new boiler or heat pump. These are always amounts that you can deduct.”
Apartments and houses
“The Flemish people’s dream is an energy-efficient house in a beautiful location, with a garden and a garage,” says Bart van Opstal. “These homes remain very popular and are an exception to the trend. If you want to offer lower than the asking price, you should bear in mind that other buyers may be willing to pay the asking price for those homes. Apartments are now even less popular, accounting for a quarter of all transactions.” One piece of advice from Bea Vandendael: “Place your offer anyway. You never know if the seller will accept it, and you would regret it if you later learned that your dream home was sold for a lower price.”
According to the notary, there is a big difference between apartments and houses in terms of energy. “Apartments with an A or B label represent half of the market. This is completely different for houses, where the share of homes with these labels is less than 20 percent.
Figures from Notaris.be show that the price for an apartment with an A label increased by 28.6 percent between 2018 and 2022. The average price for a house with an A label increased by 33.2 percent during that time. In contrast to the price increases, of course, the buyer has more control over his housing budget.”
How do you approach the negotiations?
Both Bea Vandendael and Bart van Opstal emphasize the importance of a good argumentation for a bid. “Prepare well, because only then will you have a good chance of convincing the seller,” says Bea Vandendael. “Also, make your offer only valid for a limited time, so that the seller cannot use it to find a buyer who can make a higher offer in the meantime.”
Bart van Opstal: “Before you make a bid, you explore the market. Look up what’s available in the area, visit different properties, explore the location, and ask the neighbor if there’s anything you need to know about the home or the neighborhood.
A pleasant chat with the neighbor can provide very valuable information and lays the foundation for a pleasant relationship later on. Also, try to speak directly to the owner. Sometimes they want to sell the house quickly because of an expensive bridging loan or because they inherited it and have to pay inheritance tax in the short term. Then a seller will add water to the wine faster. That is good to know as a prospective buyer.”
