How to Make an Offer on a House
Once you’ve found your perfect new home, you’ll need to put in an offer to secure it. This can be a daunting prospect, especially if you’re a first-time buyer and haven’t been through the sales process before.
It can be tricky to know what to do when putting in an offer. Should you put in a high offer and potentially waste money? Or should you put in a lower offer and potentially lose the house? We look into how to make a good offer on a house, what to offer and the best way to do so.
The Best Way to Make an Offer on a House
Get Your Finances in Order
Before you even begin house hunting, you should have an idea of how much you can afford to spend on buying a property. If you are not a cash buyer, you should try to get a mortgage in principle – not only will this secure how much you can spend, but it will also show estate agents and property sellers that you are serious and could help to move the property sale along quickly.
You shouldn’t tell anyone what the maximum limit you can pay is, and you should also make sure to look at a range of properties at the lower and higher end of your budget. If you find a property that is perfect for you, try not to be too outwardly keen. If the seller knows you really want the property, they will think you will be willing to pay more and may try to negotiate any offer you make to a higher amount.
Before you make an offer on a property, you should do your research on property prices. So, look at the local property market and see what similar properties have sold for, or are valued at. This will give you an idea of how much you should be paying.
You should also look at how quickly properties are selling. You could speak to your Estate Agent for their opinion and current experience of the local property market too. If the local property market is moving slowly, there will likely be more sales going through below the asking price. If this is the case, you may be able to put in a lower offer. However, if the market is moving quickly and there are lots of people viewing and making offers, it could be in your interest to put in a higher offer.
What To Offer on a House
When you have an idea of prices in your area, you should be ready to make an offer. You should always leave room to negotiate and don’t go too low or too high with your first bid.
You should work out exactly what your maximum offer will be and make sure you do not make an offer that exceeds this amount. Your first offer should be below the maximum amount you’re willing to pay, as you will likely negotiate up with the seller from your original amount.
Most people make a first offer that is between 5% and 10% below the asking price. This is because sellers will often put their asking price above the actual valuation, as they will also be leaving room for negotiation.
You should never begin with an offer above the asking price unless you know that another party has already made an offer for that price. Whilst going too low will risk losing the house, going too high too quickly could mean you waste money.
How to Put in an Offer on a House
When you are ready to make an offer, you should speak to your estate agent. They will take your offer to the seller and come back to you with their decision or negotiation. The estate agent will then take any subsequent offers to the seller until you reach a final decision.
When you speak to your estate agent, you should make sure it is recorded, either by letter, email, or a recorded telephone call. You can then use this as evidence to support your offer if needed.
Changing or Withdrawing Your Offer
If you change your mind, you can change or withdraw your offer at any time until contracts are exchanged. Once the contacts have been exchanged, your offer is final, and the sale will be legally binding. If you attempt to pull out of the sale at this point you will likely lose your deposit and also risk being sued by the seller.
If a survey brings up an issue with the property that affects its value before contracts are exchanged, you can request that the seller fixes the issue, or you can put in a lower offer. The seller does not have to agree to do either, but you will be able to withdraw your offer at this point if you no longer want to go through with the sale.
The rules around changing or withdrawing your offer are different in Scotland, where you can’t adjust your offer unless the seller agrees once a contract is agreed. If you can’t meet the terms of the contract, for example, by pulling out of the sale, you could be sued by the seller.
What to Do If Your Final Offer is Rejected
It can be very disappointing if the seller goes with another buyer’s offer, and you lose out on the property. If this happens, you should still stay in touch with the estate agent and let them know you are still interested in the property. That way, if the original buyer drops out, you can still be in the running to purchase the home.
Whether you’re buying or selling, SOLD.CO.UK are the property experts. We have a number of properties available to sell and can help you every step of the way to secure your new home. If you’re selling your property, we can sell faster than any other UK estate agent, with our fully managed property sales service. We’re also completely free and can even cover your legal fees. Contact us to see how we can help with your property today.