Being ready to make an offer on a property is an exciting stage in your home-buying journey. From making sure you ask the right questions to negotiating tactics, there's a lot to think about.
Here are some tips to help you snap up your dream home.
What do you need to know before making an offer on a home?
Once you find the right property, it helps to get a complete picture before deciding how much to offer. Asking the right questions will help you understand more about what the seller's motives are, as well as whether there is likely to be competition from other buyers.
Things to ask the estate agent before making an offer include:
- how long have the current owners lived at the property?
- have the owners found somewhere to move to?
- how long has the property been on the market?
- has the price been reduced?
- have there been any offers so far?
- is the property being marketed by more than one estate agent?
- are any fixtures and fittings included?
- what is the Stamp Duty (Land and Buildings Transaction Tax in Scotland), if applicable?
A good tip is to check to see if any old listings are still live on the internet. This will give you an idea of how long the owners have lived there and how much they paid.
Other factors to consider when buying your first home
Before you make an offer on a house or flat, it’s also worth looking into:
- the price of similar properties in the area
- local schools and their Ofsted ratings and catchments
- local amenities and cost of living
- transport links and associated noise/pollution
- any current or future plans for improving the local area
- any outstanding planning applications in the road or close by
- crime rates
How do you know how much to offer?
To help set your budget, you can use an online mortgage calculator and it’s a good idea to also speak to a mortgage advisor. When you contact estate agents to enquire about properties you’re interested in, don’t reveal your full budget as you'll want room to negotiate.
When finalising your budget, make sure to factor in any potential work that will need to be done to the property once you buy it. Even simple renovations can be quite expensive.
The offer process
The most common way of making an offer on a home is as follows:
- Make an offer to the estate agent
- Follow up your offer in writing; email may be fine
- Wait for the seller to come back and accept or reject your offer
If they accept the offer
Ask for the property to be taken off the market immediately and all upcoming viewings cancelled. When this is done and you receive written confirmation that your offer has been accepted, you can formally apply for your mortgage and start instructing your conveyancer and surveyor.
If they do not accept the offer
Don’t rush into making a higher offer until you’ve worked out what you can sensibly afford and whether the property is actually worth the extra amount.
When you make an offer
When you make an offer on a house or flat, don’t forget to mention anything that may set you apart from other buyers. For example:
- are you chain-free or in a small chain?
- do you already have a decision in principle from your mortgage lender?
- do you have a sizeable cash deposit?
- do you already have a solicitor and/or conveyancer?
How to negotiate when buying a home
There's no magic formula to decide how much you should offer on a home. Remember, the estate agent is working for the seller and that is how they make their money. Always try to stay friendly and keep your cool.
If you're not confident with negotiating, practice with a family member before you make the offer over the phone. If negotiating is really not one of your skills, you can use a buyer’s agent.
What is the sealed bid system when buying a home?
Sealed bids may be used in areas where there's a lot of competition, such as London. Interested prospective buyers put their maximum offer in a sealed envelope and the seller chooses the highest offer.
It’s worth asking the estate agent roughly what other buyers are going to offer. Remember, the estate agent is acting for the seller. Another tip is to go slightly higher than the nearest round number, so £400,045 rather than £400,000.
Buying a home in Scotland
It’s important to know that the home buying processes differs in Scotland. Unlike in England and Wales, when you make an offer on a property in Scotland (and all the conditions have been met) it is legally binding.
For this reason, many homes in Scotland are sold using the sealed bids system.
Your home may be repossessed if you do not keep up repayments on your mortgage.