29th November 2018
Now you’ve found your dream home, it’s time to make an offer. But how much should you offer? Do you put in a high offer to secure the property? Or do you put in a low offer and risk it being rejected and someone else lucking out instead? Well, we’ve got you covered; here are a few tips for making an offer on a house.
Before making an offer on a house
When you’ve found the house you want to make an offer on
Putting in a lower offer can be daunting but there are some circumstantial factors which could work in your favour:
Open negotiations vs sealed bids
Once you’ve established what an appropriate amount to offer on the house is, given the above considerations, it’s important to understand whether the seller is open to negotiation or sealed bids.
If the seller is open to negotiations they will deliberately put their homes on the market for more than they expect to get. Because of this, it’s best to start with a low offer (around 5% -10% below asking price is best practice). You should only offer more than the asking price if the agents tell you that the seller has already been offered the asking price or, if you are worried that you’re not going to get the house of your dreams.
A sealed bid offer is when you write down your offer and seal it an envelope. The estate agent will give all of the bids to the seller who will usually, of course, choose the highest. This way of selling a house is more common in high demand areas, such as London, as a sealed bid often gets the seller more money than they expect. As a buyer, if you have fallen in love with a house which is being sold in this way, do a lot of research on the recent sale prices of houses in the area to make an educated guess on a compelling but fair price to offer.
We hope these tips for making an offer on a house have helped! If you have any more questions on securing your mortgage and home as a Contractor, get in touch.
All content is accurate at the time of publication
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