Tips for making an offer on a house

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.

 

Tip for making an offer an a house

 

Before making an offer on a house

  • Keep an eye on the property market, in particular, be aware of how much similar properties in the area are selling for and, how fast. If the market is moving very slowly and properties are going below the asking price, then you are in a strong position to make a lower offer than the asking price

 

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:

  • Find out how long the house has been on the market for. If it’s been some time it suggests that there has been a struggle to sell it, potentially because it is overpriced. Check on property search sites like Zoopla to see if the price has been reduced in the last few months

  • You also have an opportunity to make a lower offer if the seller is in a rush to sell and you can show that you can act quickly. This is especially good for first-time buyers. The seller will be less interested in someone who will take a long time to get the funds, especially if they are looking to buy a new house but are caught in a chain

  • Check if the seller is using multiple estate agents. It is likely that the estate agents will persuade them to accept a lower offer to guarantee earning the commission over another estate agent

  • You should discuss with the estate agent of the property you want to buy which fixtures and fittings will be included in the sale price. Make sure to have this in writing and consider the impact on sale price this will have. Having it in writing will reduce the likelihood of a disagreement later in the process

 

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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