How To Make An Offer On A Property
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If you’re looking to buy your first home, or maybe haven’t purchased a house or a flat in a very long time, you might be wondering exactly what the process is when it comes to making an offer on a property.
In this post, I am going to break down all the things you need to do when you make an offer on a property and how you can make your offer more attractive to the sellers.
Getting to the stage where you feel ready to put an offer on a property is a very exciting time indeed, especially if you’re a first-time buyer.
By this stage, you’ll likely have your mortgage offer (also called a decision in principle or ‘DIP’) in place and a good idea of how much money you want to offer for the property you’re planning to purchase.
Let’s take a look at the steps involved when making that all-important first offer on a property.
Before Making An Offer On A Property
Before making an offer on a property, one of the best things you can do is make the Estate Agent aware of anything that sets you apart from other buyers.
Here are some of the things that could go in your favour:
- You are a first-time buyer
- You are chain free
- You have a large cash deposit
- Your mortgage is arranged (DIP)
- A Solicitor and Conveyancer have been instructed
All of the above can make you much more attractive to a potential buyer.
How To Make An Offer On A Property?
The Offer Process
The offer process can be broken down into three simple stages.
- Make The Offer
First of all, you’ll need to make an offer to the estate agent telling them exactly how much you’re prepared to pay for the property.
- Follow Up In Writing
Next, you’ll want to follow up on your offer either by email or in writing. This means both you and the estate agent will have a copy and there can be no quibbling or misunderstandings over how much money was offered on the property.
- Play The Waiting Game
Finally, you’ll need to wait to hear back from the seller as to whether they accept your offer. This can take anything from a few hours to a few days and can be quite a nail-biting time!
If your offer is on the low side, the estate agent may let you know immediately that their client has given them permission to reject offers below a certain price.
What Happens Next?
When you do hear back from the Estate Agent, it can go one of two ways.
Offer Accepted – If your offer is accepted then congratulations! You’re on your way to buying a property. Ask the Estate Agent to remove the property from the market immediately and to cancel any further viewings.
Offer Rejected – If your offer is rejected then you’ll want to consider whether you can afford to increase your offer, taking into consideration how much the property is worth. Offering over the asking price can sometimes cause complications with your mortgage offer so do seek advice before doing this.
If you didn’t get the response you wanted, try chatting to the Estate Agent to try and find the lowest price the seller will agree to and discuss any reasons for offering a lower price, such as extra work that needs doing to the property or the property being in poor condition.
What Is The Sealed Bid System?
The sealed bid system is when several interested parties are invited to bid on a property and then the seller chooses the best offer from all of the bids.
As the bids are sealed, no one involved knows how much other parties have offered for the property.
This can stop two parties from ending up in a bidding war against one another but also means some interested parties can miss out on a property for the sake of a few hundred pounds.
While it might seem like the highest bid will win the day with sealed bids, that’s not always the case. Sellers often take into consideration other factors such as whether the bidder is chain free or a cash buyer as these can often speed up the buying and selling process.
This system is used in areas where there are fewer properties to go around, such as in Scotland and in some areas of England.
Sealed bids are not legally binding in England and Wales so you can still pull out of the purchase until the exchange of contracts. Things work slightly different in Scotland where it’s not legally binding until the conclusion of missives.
I really hope this post has given you plenty of insight as to how making an offer on a property works and what you can do to ensure you’re in the strongest position possible when making that first offer.
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