Making an offer on a house: So, here’s the scenario. You have just found the property of your dreams; it is perfect in every way! You are now at the point of making an offer on a house, but how do you go about it to maximise the chances of your offer being accepted?
Making an offer on a house
If you are wondering how to make a formal offer on a house, you are not alone. With the average person now owning just three properties in their lifetime, the process of buying a property is not something many people have a vast amount of experience in.
Questions to ask when buying a house
When you are viewing a property you are interested in, there is some basic information that can be very helpful.
The property: Ask about the property and its history. When was the property built? Have there been any extensions or other major work? Have there been any problems with flooding etc.
The area: Ask about the local area and the neighbours. Is there any planned development work in the area? What are the neighbours like? What are the local schools like (even if you don’t have any children and are not planning to have any, information about the local schools will tell you a lot about the area in general). You can also gather a wealth of information about the local area online.
The owners: Ask about the current owners. What are their plans for when the property is sold; are they buying another property, or renting? What is their motivation for the sale?
What to know when making an offer on a house
When you are making an offer on a house, how much lower than the asking price you offer will depend on several factors.
- How motivated are the sellers? Do they need to complete the sale by a certain date?
- How much interest is there from other buyers?
- What have similar properties sold for locally?
- What is guide price? Is there an ‘offers in the region of’ price? An estate agent may give some indication of what is a good offer to make on a house?
- If you are relying on a mortgage to finance the purchase, how much is your lender likely to value the property at?
- What offer to make on a house will ultimately be dictated by how much you can afford to pay for the property
How do I make an offer on a house?
It can be difficult knowing what to consider when making an offer on a house, but once you are happy you have enough information, it is time to get on with negotiating house price details.
The seller’s estate agent can offer tips for buying a house and some advice on what to do when making an offer on a house, but it is always important to remember that the estate agent works for the seller, and the more they sell the house for, the higher their commission is likely to be!
Decide on the figure you are not willing to go above – this should be based on how much you can afford and how much you believe the property to be worth. Once you have this figure in mind, your strategy will depend largely on how much other interest there is on the property.
If there isn’t a huge amount of other interest, you can take a chance and put in a cheeky low offer to gauge the reaction from the agent and the seller. It is wise to start with an offer around £10,000-15,000 below your top figure (or more, if you think the seller might accept it). This will give you room to negotiate, helping the seller to feel that you have both compromised, and will also help you to get a feel for what figure the seller is really looking for (this should be clear by the agent’s reaction and how quickly the seller responds to your offer).
If the estate agent rejects your offer without referring to the buyer, it means it is below a set amount that has previously been agreed between the seller and their agent, and you’ll need to up your offer significantly.
If there is significant interest from other buyers, and your top price is less than the asking price, you may be better to do a ‘best and final’ offer upfront, but when you do so, ensure you present your case well, highlighting all of your strengths as a buyer. These may include:
- Being a first time buyer
- Being a chain-free buyer
- Having your mortgage lined up and agreed in principal
- Being a motivated buyer and therefore being keen to progress the sale quickly
- Being flexible on completion date to fit around the seller’s requirements
Start the conversation with examples of how you are the ideal buyer before mentioning the figure you want to offer for the property – you need to sell yourself to the agent and get them taking you serious before you mention the price if you want them to put your offer forward to the seller favourably.
Making an offer on a house before selling mine
Making an offer on a house before you have sold your own property can be tricky. All of your negotiating power comes from being a proceedable buyer. If you have not yet found a buyer for your property, you are unable to give the seller any indication of when you may be ready to proceed. In reality any offer you make on the property is hypothetical; “if/when I manage to sell my house, I would like to buy your house for £X”.
It can be a bit of a chicken and egg scenario. You don’t want to agree a sale on your own property and then find you are struggling to find a property that you want to buy, but similarly you don’t want to find the property of your dreams and not be able to proceed because you don’t yet have a buyer for your own property.
A genuine cash home buyer like Quick Move Now can help in this situation, offering you a guaranteed house sale on the date of your choice. Selling your property to a professional home buyer effectively makes you a chain-free buyer, which makes you more proceedable and a far more attractive buyer than another buyer who has agreed a sale on their property but is still in a property chain, vulnerable to hold ups and chain collapse.
A chain-free buyer has a huge amount of negotiating power, especially one that can time the house sale and purchase on a date that suits the seller.
How to make an offer on a house for sale in Scotland
Buying a property in Scotland works slightly differently. Instead of making a formal offer, and having the opportunity to revise your offer if it is not accepted, properties in Scotland are sold via sealed bids, so you only have one chance to make a ‘best and final’ offer.
How to bid on a house: Before you can bid on a property in Scotland, you need to have a ‘mortgage in principal’ in place and a solicitor who is happy to act on your behalf. It is your solicitor who will put forward your offer. They do this in additional to the usual conveyancing work that solicitors do when purchasing a property in the rest of the UK.
Once you’ve decided you would like to put in a bid on a property, your solicitor will inform the seller’s estate agent that you would like to submit a ‘note of interest’; this means they will keep you updated with any developments in the sale of the property, including the closing date to submit your bid.
It is usual to get your solicitor to carry out all of the relevant searches on the property before you submit your bid, which will have costs attached. It is worth keeping in mind that if you are not successful in purchasing the property, you will still be required to pay for those searches, so you need to be serious about progressing with a sale and hopeful that your bid will be high enough to be accepted.
Alternatively you can ask your solicitor to carry out the searches once you have had an offer accepted, but this will need to be cleared with the seller as it could hold up the purchase, or even result in your wanting to lower your bid or pull out of the purchase completely.
Before the owner can put the property on the market they are required to put together a home report. This report will include a RICS survey, an Energy Performance Certificate (EPC) for the property and a Property Questionnaire which includes information about Council Tax, any alterations made to the property, and any other important property information, so you should have a good deal of information on the property before you decide to put in a bid.
When you are ready to make your offer you will need to think about how much you would be willing to pay for the property. Finding out how much similar properties in the area have sold for and how much interest there is from other buyers will help to give you an idea of how much the property might sell for, but ultimately the offer you make will be dictated by how much you can afford to pay for the property.
Once the closing date has passed, the seller’s solicitor will call your solicitor to let them know whether your bid has been successful. If your offer is accepted, your solicitor will handle the exchanging of contracts and completion of the sale.