Making an offer on a house is an exciting but potentially daunting prospect, especially if it’s your first home.
We often get asked, “how do I make an offer on a house?” So, our handy guide will help take you through the process to give you the best possible chance of landing your perfect property.
? Work Out How Much You Can Afford To Spend
It’s surprising how many buyers begin viewing properties and then make offers based on vague assumptions of what their budget is.
Before you even begin any viewing, it’s important to find out exactly how much you can afford to pay for a property, whether it’s money you have in the bank, or with a mortgage.
Getting a mortgage in principle (decision in principle or DIP) before making any offers can increase your chances of having an offer accepted and being seen as a serious buyer, so it’s worth speaking to a mortgage advisor before you start any viewings.
? Research The Area
Knowing how much to offer and how much to reveal to the seller can be a real minefield. On the one hand, you don’t want to pay over the odds, but on the other, you don’t want to make an offer so far under the asking price that they don’t even want to begin negotiating with you.
Take a look at how much other properties in the area have sold for recently and use these as a guide when making your offer.
Preparation is key when it comes to making a fair offer that the seller will be willing to consider.
? Don’t Show Your Hand Too Early
When viewing a property it’s usually a good idea to downplay your excitement even if you’ve found your dream property. If the seller realises how much you’ve fallen in love with the place, it can severely weaken your bargaining position as they’ll think you’ll pay whatever it takes to get it!
Show you’re interested by asking lots of valid questions but don’t fall into the trap of saying how much you really love the house.
Next Steps: Making An Offer
Once you’ve researched the area, worked out your definite budget and found a property, it’s time to make your offer.
Call the sellers estate agent and tell them the offer verbally. They are obliged to inform the seller, regardless of what your offer is. Follow up with an offer in writing. An email should be sufficient, and this will help to avoid any confusion or arguments further down the line. Emphasise what makes you an ideal buyer. For example, first-time buyers are often attractive to sellers as they come chain-free, while cash buyers are probably the most sought after as they’re likely to be able to complete in the quickest time.
Remember, most sellers are looking to move fairly quickly, so anything that can help speed the process up is likely to put you in a stronger position. If you don’t have any ‘USPs’ then maybe detail why you want to buy the property. It may be for emotional reasons, or because you have grand plans for raising a family there. It won’t necessarily make a difference, but if it comes down to you and one other buyer then it might just swing it in your favour.
Prepare to negotiate. Once you’ve made your offer it’s likely that the seller will come back with a counter-offer. All of this is conducted via the estate agent who is working on behalf of the seller.
How Much Should I Offer?
There’s no set rule on this as every transaction is different. If you know there’s been a lot of interest in the property then you’re likely to have to pay the full asking price, possibly a little more.
However, if the property’s been on sale for a number of months and has already been reduced in price then you may be able to knock the seller down on price.
This is where your research will come in handy. Try to figure out what your strengths and weaknesses are in the negotiation. This is another reason why it’s a good idea to look at properties that are slightly below your budget, so you’ll have a little more room for maneuver.
Another point to consider when it comes to your strengths is to work out what makes you a good buyer. If it’s your first property and you already have a mortgage in principle agreed, or if you’re a cash buyer, then these can put you in a very strong position to negotiate a discount as you should be able to move quickly.
Whatever you do though, make sure your offer is realistic, and don’t try to lowball the seller!
BOP are your local property experts for the South West area.
Call us on 01237 479999 or email email@example.com to find out how we can help you.