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Making an offer on a house: Where to start

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When it comes to buying a property, the easy part is finding the house of your dreams. It can get much more complicated when you put in an offer and negotiate on the price. Most of us aren’t that comfortable with trying to get a reduction, so where should you start when making an offer?

What’s your position?

When deciding what price to start at, you need to think about the position you’re in and if this offers the seller any advantages. For example, a first time buyer, a buyer with no chain or one who has their mortgage in place already is much better placed to proceed with the sale quickly. If one of these applies to you, then it might be worth starting at a slightly lower price.

House keys

What’s the seller’s situation?

It’s worth checking with the estate agent as to whether or not the seller is likely to accept an offer lower than the asking price. Ask them if they need to move quickly or can afford to wait for the right price. If you know the local area well, think about how long the property’s been on the market. If the house has only recently gone up for sale they probably won’t accept the first offer if it’s below the asking price.

Set a budget

It’s important that you consider the price you want to start at, as well as the maximum amount you can afford to go to. You don’t want to get sucked into a tough negotiation and be tempted to go over you budget. You need to take into account all the associated costs, including mortgage fees, valuations, legal costs, surveys, stamp duty, removal costs, repairs and furniture and decorating. These can all quickly add up and take you over your budget.

Putting in an offer

When you go to the estate agent with your initial offer, make sure it’s a realistic one, otherwise they might not take you seriously. If you’re offering significantly less than the asking price, have a justification for why you’re doing so. This could be due to any essential repairs that need doing or to reflect the current local market conditions.

If your first offer’s not accepted, don’t be tempted to offer more straight away. Go away and take your time to consider whether the property’s really worth it and if you can afford to go higher. Have an idea of recent sold prices in the area and whether this type of property is in high demand.

When the offer’s accepted make sure that this is subject to contract and having an acceptable survey. Ask the seller to take the house off the market, as this stops the risk of gazumping: where the seller allows other viewings and accepts a higher offer after they’ve accepted yours.

Couple making offer on a house

After your offer’s accepted

It’s important that you keep on top of everything when your offer’s accepted. Any delays in the legal or financial process could put the seller off, especially if they need to move quickly. You might need to chase the conveyancing solicitors and the bank to push everything through and ensure that you send all your documents back on time.

Before the contracts have been exchanged you’ll need to pay your deposit and after this point you can’t pull out of the process. The completion date will be set after this and this is the point at which all the money is transferred and you become the legal owner of the property.

 

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About Catherine Stern

About Catherine Stern

Catherine Stern is a freelance writer with a background in marketing and PR. She currently writes web content on a range of subjects, from finance and business to travel and home improvements. As a working single mum of two young boys she understands the pressures that today’s working parents face and the topics they want to read about.

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