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 the property you have your eye on.
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, and whether there’s 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?
How much tax would you need to pay on the property, if applicable?
A good tip is to check to see if any old listings are still available online. This will give you an idea of how long the owners have lived there, and how much they paid.
To help set your budget and work out how much you can afford, you can use an online mortgage calculator. It’s also a good idea to speak to a mortgage adviser. 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 expensive.
The most common way of making an offer on a home is:
Make an offer to the estate agent.
Follow up your offer in writing, or email.
Wait for the seller to come back and accept or reject your offer.
Ask for the property to be taken off the market immediately, and all upcoming viewings to be cancelled. This is to avoid anyone offering a higher price after the seller accepts your offer. This is known as ‘gazumping’.
When this is done and you receive written confirmation that your offer has been accepted, you can formally apply for your mortgage.
You can now instruct your solicitor or licensed conveyancer to start the legal work.
You might also arrange for a surveyor to carry out an independent survey on the property to flag any potential problems.
Don’t rush into making a higher offer until you’ve worked out what you can sensibly afford and whether the property is worth the extra amount.
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:
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, practise 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.
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 £400,500 rather than £400,000.
It’s important to know that the home-buying process differs in Scotland. When you make an offer on a property in Scotland (and all the conditions have been met) it is legally binding; unlike in England & Wales, where it isn’t until you exchange contracts with your seller.
Your home may be repossessed if you do not keep up repayments on your mortgage.