Once your house hunt has led you to the property you’ve been looking for, the next step is to make an offer. If the offer is being made to an estate agent, you can do it verbally or in writing. A verbal offer can be made in person or over the phone, and once it has been submitted, you may be asked to confirm it in writing for the agent’s records. This can usually be done by email.
The agent is obliged to pass the details of your offer to the vendor for their consideration. It can be helpful to tell a story of what makes you a good buyer and highlight why they should choose you. It is unwise to assume that simply paying the asking price will be all you need to do.
Things to keep in mind
- Be prepared – having a strong knowledge of what you can afford, along with evidence to confirm it (such as a mortgage agreement in principle) will give the impression that you are organised, reliable and serious. Have a solicitor in place whose details you can pass on to the agent when you submit your offer.
- The advantage of being chain-free – buyers with no chain (like first-time buyers) and those with pre-arranged mortgages often get a head-start on the competition, particularly where the seller is in a chain.
- Speed is important – if you are chain-free and well-organised, you should be in a position to complete the transaction fast. Check if the current owners in a hurry to sell or the home has been on the market for a long time. Either of these could be a sign that they might accept a lower offer to hurry the sale along.
- The flexibility of price – for vendors who are not in a hurry, the priority may be simply to maximise the price they can achieve. Sellers who are in no hurry to move are more likely to keep waiting until they receive a higher offer.
- Be confident – if you offer below the asking price, you don’t need to apologise. The offer you make is the amount you are prepared to pay for the property.
If your initial offer is not accepted, there could be opportunity for offers and counter-offers to reach an agreement. An agent has to be transparent with you and will let you know if there are other interested parties. It is wise to know your budget ceiling so identify your maximum limit from the outset and stay within it. If the seller is unwilling to budge, you need to think long and hard about whether the property is truly worth the extra money. You will also need to think about sacrifices you can make to afford the additional money in the long-term.
It pays to do your homework and get an accurate picture of what the property is actually worth. Sold house prices can give an idea of recent sales, but it’s better to look at the current competition. Look for similar properties for sale in the area – if there are not many around, this gives the seller the upper-hand. However, if you can identify faults or repairs the property needs, this can justify a lower offer. In times where buyers are fewer and further between, sellers are often more willing to negotiate on price.
Once you make an offer on a property
When an offer is made, you need to make it very clear that it is:
- Subject to contract (STC) – the sale is only completed once lawyers have exchanged the legally-binding contracts.
- Subject to survey – this allows you to factor in the cost of any faults/issues once your surveyor has thoroughly examined the property.
Once you get an offer accepted, check with the estate agent to make sure the property is taken off the market. It should no longer be advertised or listed as available for viewings. If another interested party views it, there is the risk of them sabotaging your deal with a higher offer – this is known as gazumping.
The estate agent should send you a letter that confirms your offer. If you don’t receive this letter, be sure to ask them for one.