Making an offer - useful tips for first-timers
You may have found the house of your dreams and be desperate to secure it as your own, but if the price is out of your budget, then the chances are it could take a bit of time and most importantly, patience, to get it down to a more suitable figure.
A lot of how you approach the situation will depend on what state the property market is in – for a slow property market it can often be tempting to put in more of a cheeky low offer, but with a fast property market it’s sometimes not worth taking the risk.
Work out its value
Get the property you are interested in valued – this will give you a good starting point for deciding how fairly priced it is and whether it is actually worth the asking price or not.
Find out how keen the seller is to move – if they love the property and don’t even have another house to move into yet, then they aren’t going to be particularly interested in accepting a lower offer. If they are desperate to move and have another house waiting, then they may be more willing to negotiate.
You can also ask the estate agent about how many other offers that have been made on the property – although they won’t be able to tell you much due to legal reasons, they will be able to indicate whether they were close to the asking price or not.
Think about its worth to you
Once you know the circumstances of the seller, its time to think about how important the house is to you. If you have been house hunting for years and this is the first property you have found that ticks all your boxes, then you really don’t want to lose it and it could be worth matching the asking price.
If the property is one of many that you have seen that can match your needs, then the chances are there will be other houses that you can get in your budget if this one seems to be over-priced.
It is also worth taking into consideration how many changes you would need to make before or after you have moved in and how much that will add on to the price of the property.
Do your research
It is important to do your own research on a property and an area, as you want to make sure you know as much information as possible before committing to anything.
There are some great sites out there to help you find out more information: propertysnake.co.uk will give you details on how long the property has been on the market and whether it has dropped in price at any time, and houseprices.co.uk will tell you how much similar properties on the same street last sold for.
Making an offer
In order to make an offer, you need to make sure that your mortgage will be approved for that amount and also take into consideration that the offer is subject to a satisfactory survey.
The building survey could find real problems with the house that could affect it further down the line, and without having a mortgage approved there is no guarantee you will be able to afford the repayments.
When it comes to making an offer, the research you have already carried out will be invaluable to you so you know where you stand in terms of the current asking price. You can make your offer over the phone to the estate agent or in person at their office.
If you do decide to offer the asking price, then make sure they agree to take the property off the market straightaway and give you a time scale for the completion of the sale.
It’s time to make your offer
When you've found the property for you, it's time to make your offer. Take your time when making your first offer. Some buyers are actually in a more favourable position so make sure any of the below are made clear, if you meet any criteria – it could be the difference!
You are a first time buyer
You are not in a chain
You have a pre-arranged mortgage offer
Before you make an offer, also find out the seller’s position. If they have had the property on the market for a long time they may be willing to accept a lower offer. On the other hand, a seller who is in no hurry to move may be more prepared to hold out for a higher price. Balance this with your needs and make the best offer you can to secure you the purchase.
If more than one party offers on the property, you may get taken to best and final where you will have to put down your maximum bid. The highest then will be accepted.