Before you make an offer

The first thing you need to do is prepare and do your homework. The more pre-planning you can do the better, as then you’ll go into the negotiation process full of confidence. So, what should you do?

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.

Identification

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.

  1. Make your first offer your best offer: show you’re a serious buyer and try to avoid getting into a drawn-out negotiation process.
  2. 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.

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:

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? 

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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.


28 May 2020
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