How to make an offer on a house successfully
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High, Low, Just Right: How to Make an Offer on a HouseAfter looking at properties for sale, securing a mortgage deal and viewing the house, you’ve finally found The One. Once you’ve found a property (within your budget) that you really like, even love, you might consider making an offer on a house.
It’s the Goldilocks conundrum of property: how much should I offer on a house? Determining the right offer for a house can feel like a delicate dance. While buyers want to land their dream home without overstretching their budget, sellers aim to get the best possible price for their property. Without souring your relationship with the seller, here’s how to make an offer on a house and what that should look like.
Before you enter the market, make sure you know exactly what you have to spend. Get a quick figure with an online mortgage calculator.
Speaking to a mortgage broker is a good place to start, as they’ll be able to give you a realistic figure based on your personal circumstances.
Whether you offer more or less (or right on) the asking price will depend on a few factors. One of the largest factors is the current market conditions, that is, whether it’s a buyer’s market (with plenty of homes for sale or a seller’s market (where there are more buyers than sellers).
Typically, buyer’s markets come with a lot of flexibility on price because inventory is high and homes may sit on the market for longer. In this situation, sellers may be more willing to negotiate on price to get an offer and move.
In a seller’s market, the seller may have multiple buyers interested in the one property. This makes it much harder to go below the asking price. If you’re determined to make that house your home – and you have the finances to support the decision – it may be wise to offer the asking price or consider offering more if you can.
Other sellers may act more ruthlessly by submitting an all-cash offer or waiving home inspections to persuade sellers to accept their offer. Prepare to get competitive in this case. But as always, avoid offering more than what you’re happy to.
When should I offer below the asking price?
As mentioned above, if you’re currently in a buyer’s market, you may be able to offer less, depending on the competition. Additionally, any research you can do on the property may help you to support a lower offer. For example, has the property been on the market for a long time? If so, the seller may be keen to negotiate a lower offer to sell.
If you think that the property requires a lot of work to bring it up to standard, you may consider a slightly lower offer. If you’re chain-free or a cash buyer, you’re more desirable to sellers, and may outpace other buyers because of this.
Remember that offering below the asking price should always be a reasonable figure to be considered.
When should I meet the asking price?
Many times, the asking price can be spot and, or even seem like a bargain. Other times, you should consider meeting the asking price when you feel strongly that the property is right for you and you don’t want to miss out.
How about offering above the asking price?
If you’re house hunting in a competitive market, such as a seller’s market, the seller may have several good offers on the table. In this case, you may consider offering more than the asking price to be considered.
Competition can lead to poor decisions, so before entering a bidding war or offering more than the asking price, consult your budget. Keep your affordability in mind at all times so your dream home doesn’t turn into a nightmare financial strain.
estate agent. Your offer will be presented to the seller via the estate agent, along with any comments you send. It’s good practice to submit an offer in writing as well.
Estate agents are required by law to tell the seller about every offer. The seller can then decide to accept, decline or propose a counteroffer to you, through their estate agent.
While having an offer accepted is a big and exciting step in the home-buying process, the process isn’t complete yet. In England and Wales, acceptance of an offer is not legally binding (it’s only when contracts have been exchanged that it becomes so).
If a seller has accepted your offer, you can ask them to remove the property from the market. However, they’re under no obligation to do so, and may want to keep it on the market in case they get a better offer.
Can I change my offer once it’s been accepted?
Legally, you’re able to change an offer once it’s been accepted, but you need a good reason to do so, especially if you’re lowering the offer price. Situations may warrant revising the offer, such as costly issues turning up in the survey. Gazundering (lowering the offer before exchanging contracts) for financial gain is not recommended.
Can a buyer withdraw their offer altogether?
The same as above, you’re not legally obliged to follow through with an offer until the exchange of contracts. Again, this isn’t something you should do without a very good reason.
Buying your home with Purplebricks is easy. Find homes in your chosen area and book viewings with ease. For more information on buying your next home or booking a free house valuation, look at our buying guides.