Top Tips For Making An Offer On A House
Putting in an offer on a house is the first step towards securing your beautiful new home and it can be quite daunting, particularly for first time buyers who are new to the housing market. With so much money at stake, you want to be sure that you get the best possible deal. Doing this means seeking a fine balance with other factors such as what the seller is willing to accept and what is going on in the wider housing market. Misjudge the situation and you could quickly lose your home to another buyer.
The truth of the matter is that every seller is different so choosing the right offer will always require some level of personal judgment. Even if there was a simple calculation for working out the ideal amount to offer on a house, the ‘right’ offer is ultimately going to be the price you are prepared to pay.
Here, we are offering you our top 5 tips for making an offer on a house. Hopefully, this will help you plan your bidding strategy and improve your chances of getting an offer accepted.
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Top Tips For Making An Offer On A House
Do Your Research
Before making an offer, make sure you know and understand the local market and be aware of what similar properties in the area are selling for. You can check recently sold house prices for houses easily on many websites such as Zoopla or Rightmove.
Find local houses that have similar features to the one you are interested in and use the prices they recently sold for to judge whether your offer is reasonable and likely to be accepted.
Features that could affect the price of a house include:
- Number of bedrooms and bathrooms
- Whether it has parking, a drive/ garage and/or a garden
- Whether it has been recently renovated or modernised
Local factors that can affect the price of a house include:
- Proximity to amenities, such as shops transport links and doctors surgeries
- Proximity to good schools
- Infrastructure links (this has both positives and negatives)
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Create A Bidding Strategy
Your approach to bidding will depend on things such as:
- How much you can borrow on your mortgage
- What you are willing to pay
- What local properties are selling for
- The desirable features of each individual property
Your own personal preferences, like:
- Whether you want a quick and easy purchase
- Whether you’re prepared to lose your house during negotiations so long as you get the best deal
There are couple of ways of going about making offers:
Make your best offer straight away – this could be under, over or at asking price depending on the circumstances
Make a lower offer under the asking price and begin negotiations
In certain circumstances, it may be worth making a lower offer initially. There will usually be room for negotiation even if your first offer is not accepted. You might make a lower offer initially when:
- The area is less competitive
- The house has been on the market for a long time
- It needs work doing
- You are simply looking for a bargain
You may also get away with making an offer below the asking price if the seller wants to make a quick sale and you are chain-free or a cash buyer.
However, there is always a risk ; the seller may receive a higher offer or they may be insulted if the offer is too low. So long as you are prepared to take the risk, there is no harm in going in under offer.
Offering Over The Asking Price?
In very competitive areas, such as popular city centres, homes may regularly go for over the asking price. The main thing to remember is to keep a cool head as over-bidding may just end up failing you (for example, if your mortgage lender does not agree that the house is worth what you offered).
Where homes in a local area do receive significant interest, you are likely to encounter sealed bids and open houses. This creates competition between potential buyers and encourages them to try to outbid each other. But it can also pressure buyers into making offers higher than they are comfortable with.
Explain Why You Are A Great Buyer
In general, buyers who can move quickly and/or are not in a chain are the perfect type of buyer. These are usually:
- First time buyers
- Cash buyers
These types of buyers are often able to negotiate a better deal because it is more likely to be a straightforward purchases.
This isn’t always the case though.The seller might not be not bothered about a fast sale, only about getting the best price. Talk to the estate agent to work out exactly what the seller’s feelings are and market yourself accordingly.
Watch Your Back
If your offer is accepted, contact the estate agent and ask them to take the property off the market, particularly if the seller accepted an offer under the asking price. This will reduce your chances of getting gazumped.
The estate agent may be reluctant to remove the property but they should at least mark it as ‘sold – subject to contract’.
Also, don’t be afraid to change or withdraw your offer if you need to. Ultimately, so long as your mortgage lender agrees with the value of the property, the ‘right’ offer on a house will be what you are willing and happy to pay. Even after you have made an offer and it has been accepted, you can withdraw or change your offer right up until the exchange of contracts.
So,for example, if your searches and surveys come back and reveal that the property has many issues, you may be able to negotiate a lower price to account for these costs. Be aware that if you try to lower your offer, the seller might not agree.
Alternately, you could ask the seller to do the work themselves and if they refuse, you are within your rights to withdraw your offer.
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