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    How to Make an Offer on a Property?

    By The reallymoving Team Updated 26th Mar, 2024

    When you have chosen a property that you would like to buy, you will need to make your offer. But how do you make an offer and how do you decide on a price.

    How to Make an Offer on a Property?

    Written by property expert Kate Faulkner

    Knowing how much to offer on a property can be tricky, especially if it’s your dream home you want to live in for as long as possible.

    However, whether it’s your first or last home, the best thing to do is try to offer a fair amount. On occasion you may be able to offer less and sometimes it may even be worth offering more than the property is currently worth. It depends mostly on your finances, how badly you want the property and how long you plan on staying there for (e.g. 5 years or over 20 years).

    Understand your finances

    Before you make any offers, it’s vital to check what you can afford with a mortgage broker. It may be tempting to just chat to your bank, particularly if you have been with them for a while, but this could mean you miss out on some great deals other lenders might offer you. Some banks are also quite restrictive on what they are happy to offer and to whom, so speaking to a broker can ensure you understand any problems or unexpected bonus deals you can access.

    You can also get fee free mortgage advice from Mortgage Advice Bureau through reallymoving.

    When should you make a ‘fair offer’

    If you like the property, it suits your needs for the next 5-10 years and allows you to live the life you want, but it’s not necessarily your dream home a ‘fair offer’ is the best one to secure the deal. This means an offer that is close to if not exactly the asking price.

    Offer much less and others may quickly come in above you and unless the offer is deemed ‘fair’ by the agent or seller, they may not be keen to take the property off the market while you sort your finances and a survey on the property.

    When should you make a ‘low offer’

    Usually, if the seller needs to sell quickly, it’s possible to offer less than if the seller wasn’t in a rush. Normally this means you need to have cash readily available. In other words, nothing to sell (not even a car) and no requirement for a loan or mortgage.

    Deals will need to be done in less than four weeks, so you also need to make sure you have a good, speedy legal company ready to go.

    When to make a ‘higher offer’

    If the property is your dream home and you want to stay there for 10, 15 or 20 years or more, then it might be worth offering a higher price to take it off the market, especially if lots of other buyers are showing interest.

    However, do make sure you are confident you can fund the extra money as a lender might not support your purchase at a high price and, if the market falls, this could leave you in a tricky situation should you be forced to sell sooner than you wished.

    How do you work out what to offer?

    Whether you offer a fair, low or higher offer, it’s important to understand how to calculate what the property is likely to be worth, whatever the marketing price it’s being advertised at. To work out what a property is worth, you’ll need to research what similar properties have sold for.

    It’s useful to provide this as evidence of why you are making the offer you are, so you are able to justify this to the agent and/or to the seller.

    Find out what similar properties have sold for

    Today we have so much information on what properties are selling for and have sold for. Whatever the property is advertised for it will either be too high, with the seller hoping for an offer near to the asking price, or it could be priced fairly to sell from the start. This depends on the seller and how good the agent is.

    In the case of the latter, it may even be advertised as ‘offers over’. This could be quite a ‘keen’ price to encourage as many people to visit the property and then hope multiple offers will drive up the final price agreed.

    To work out what a property might be worth, the first job is to look at what similar properties have sold for. Have a walk around the roads near to the property you are looking to buy and note down the street and number of similar properties. They need to be:-

    1. A similar age
    2. In similar condition (you can check this online)
    3. Similar size (look at the EPC and/or the floor plans)
    4. Same number of bedrooms/bathrooms
    5. Similar outdoor space

    Of course, the type needs to be the same: flat, end of or mid-terrace, semi, detached.

    Find the postcode of the similar properties and then head to a property portal (or a few) to find how much they have sold for.

    Ideally you want to find something that sold within the last 3-6 months and then compare the price they sold for then to what they are being marketed for now. If a similar property was sold for £280,000 six months ago, but then they are now being marketed at £300,000, speak to the agent selling it and ask what the property is likely to be sold for – it may really still be worth £280,000.

    Remember if a property is ‘sold subject to contract’ but the price paid hasn’t appeared on the Land Registry (portal sites) then you can ask the agent to give you an idea of whether the property sold ‘at or near the marketing price’. Legally they can’t tell you the exact price that was agreed until it’s available online, but they will usually let you know if it was more or less.

    What drives prices up and down?

    No property is usually worth a ‘fixed amount’ such as £280,000 it’s usually along a range, for example £270,000 to £290,000. Prices can vary depending on condition, size of rooms, special features (e.g. a conservatory) and whether there is an opportunity to add value or not.

    Make your offer subject to survey

    Once you have decided what offer to make, put it in writing to the agent – this way they have to, by law, pass it onto the seller. But it’s important to make sure the offer is ‘subject to survey’ as there may be problems with the property such as damp, timber rot, subsidence, all sorts of things it’s difficult for a lay person to spot, and this may mean you need to reduce your offer after the survey returns to you.

    If you are applying for a mortgage, the lender may not want to offer the amount you have committed to and if you can’t make up the money, you may need to revise how much you can pay. Remember this will be based on a mortgage valuation, not a proper survey and won’t protect you should something be wrong with the property post purchase.

    Just be honest!

    Another way to make an offer is just to be honest about what you can afford. If the property is being marketed at £300,000, but the maximum you can afford is £275,000, then the best policy may just to be honest and say this is what you have, make sure you are ready to move (e.g. already sold your home or are in rented accommodation) and if you can, offer to the seller to wait for them to find a property to move to.

    Find out more about negotiating your offer.

    Once you’ve made your offer, there are a lot of steps until you actually buy the property, which may or may not involve revising your offer upwards or downwards.

    Find out what to do after your offer is accepted

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