Before you make an offer
Research similar properties in the area
Look up asking prices and sold prices of similar properties in the area (in terms of type and size) as the one you're hoping to buy. This will help you to better understand the local market and reassure you that the price that you’re willing to pay is right for the area you are buying in.
Have your finances and documentation ready
As well as looking at the local market you should also start getting your documentation ready. You will need to work out where your money is coming from and be able to prove you have those funds if asked.
If you’re buying with a mortgage you should speak to your mortgage adviser or lender to get an agreement in principle. Ideally, you should also make sure before you start your search that you have enough money for a full deposit. This shows the estate agent that you have the money in place and you will be looked upon favourably by the sellers.
As a prevention to money laundering, estate agents are legally required to do customer 'Due Diligence' checks. This will include taking some personal details from you, checking ID (such as your passport or driving licence) and they may also ask for proof of funds. So, make sure you’re prepared and don’t be surprised when they ask for your ID when you submit an offer. See our proof of identity and funds guide to find out more.
Decide on your bidding strategy
Now you know the financial backing you have, it’s worth thinking about your bidding strategy. There are essentially two ways of thinking.
- Make your first offer your best offer: show you’re a serious buyer and try to avoid getting into a drawn-out negotiation process.
- Start with a lower offer: try and bag a bargain whilst giving yourself some wriggle room to negotiate if your offer is rejected.
Whichever way you go, you shouldn’t offer more than what the property is worth following your research or more than you can afford.
Anxious about making an offer on a new house
Experienced estate agent Ian Harris has some guidance to make the process as smooth as possible.
Making an offer
Now you’ve done your homework and found a home you want to buy, the next thing to do is to put in an offer. You can do this by calling or going into the estate agency’s office (if they have one). It is wise to put the offer in writing to either take with you or send via email following your conversation to make sure it is recorded accurately.
The estate agent will then ask you about where the money is going to come from and they might ask questions about how quickly you can go ahead with the purchase too. It’s then their job to inform the seller, by law they must pass every offer they receive to the seller and then there’s that moment of truth: is it a yes or a no?
If your first offer is accepted, congratulations—break out the champagne. But if it’s a no, it’s either time to go back to the drawing board or enter negotiations.
Before making a second offer, it is worth finding out if any other offers were put forward and if they are higher than your current bid. This will help you figure out how much to increase your offer by. If the bids are getting near to the asking price or the limit you previously set yourself, you need to seriously consider whether it’s worth offering more money. It may seem worth it—especially for your dream home—but you need to take into account any extra fees you may need to pay, such as stamp duty.
Hopefully, at the end of the negotiation, you will have an offer accepted at a price that suits you.
Top tips to make sure your house offer is accepted:
First-time buyers with no chain make for attractive buyers. Your seller may be looking to move as soon as possible and if you’re in a good position, you should make that clear as it will make you more attractive than other potential buyers.
Building a relationship with your estate agent will help ensure you’re getting the best possible advice about your purchase. Try and go into their offices rather than having a phone call, sit down with them to discuss your requirements so that later down the line they can put a face to your name.
Sellers don't want time wasters. If you like the look of a property, don't dawdle—be the first to get a viewing. Being proactive is one way to show the seller you're a serious contender.
While a bit of negotiating is to be expected, don't go too low. This can cause tension with the seller and you may end up losing the property altogether if someone else offers a higher price. You should try to avoid round numbers to prevent yourself from making the same bid as someone else.
Once your offer has been accepted, ask for the property to be taken off the market straight away. This can minimise the chances of additional offers coming in over and above yours and finding you’ve been trumped.
After the offer is accepted
Having your offer accepted is a great moment but you must remember the deal is not legally binding until contracts have been exchanged.
This means there is still a risk that the seller could back out or that another person ‘gazumps’ you by putting in a higher offer which the seller accepts.
To try and avoid gazumping you can ask the sellers to stop marketing their property. This will also prevent people from being able to find it on the portals, which in turn will reduce the risk of other people putting an offer in.
You should set a realistic target date for exchange and keep in communication with the estate agent to see how things are progressing. If you are worried the sale might be taking too long read our tips on how to speed up a property sale.
Are you Propertymark Protected?
When you need an estate agent, look for a Propertymark Protected agency. By using one of our members you are guaranteed to be consulting with a professional agent who will give you up-to-date advice and guidance.
The Coronavirus (Scotland) (No.2) Act 2020 received Royal Assent on Tuesday 26 May 2020 and the law came into force on 27 May 2020. The legislation has been introduced to work alongside the provisions contained in the Coronavirus (Scotland) Act, which received Royal Assent on 6 April.
The Northern Ireland Statistics and Research Agency have released their findings for the Northern Ireland House Price Index for the period between October and December 2019 and show the positive figures from previous quarters have continued throughout the year.
The most recent report from the Registers of Scotland has revealed the average house price for a property in Scotland during December 2019 was £151,603, an annual price increase of 2.2 per cent.
Housing Secretary Robert Jenrick has announced plans to cut costs of a proportion of new homes by a third for first-time buyers.
House price data released by HM Land Registry shows UK house prices rose slightly between October and November 2019.
Latest data has revealed an overall slowdown in mortgages despite the stability in the buy-to-let market with an expected further growth of 1 per cent in the next quarter.