How to Make an Offer on a House in 2024

Written by Martha Lott Reviewed by Jonathan Rolande

3rd Jan 2023 (Last updated on 12th Apr 2024) 10 minute read

Get Pre-Approved for a Mortgage

Before making an offer on a house, you need to have a mortgage agreement in principle in place. This will give you an upper hand when the seller is considering their options.

Starting your mortgage application before you look at properties will ensure that you are a serious buyer. It will also give you the chance to look at mortgage rates and find out the maximum mortgage total that you can borrow. Using this information, you can calculate a budget and work out an initial offer.

Most estate agents will ask you during the viewings if you have everything ready in place. By having your mortgage in principle, you will look like you're ready to go ahead with the sale.

Research Sold Price History

Start by researching the local property market and any similar houses that have the same number of rooms and features. Websites such as Rightmove and Zoopla may be listing similar properties to yours.

Find out how much these properties are sold for and try to base your offer around this. Keep notes of your house viewing and jot down any defects or potential issues that may affect the price. You can then factor this into your decision, as well as into the total cost of buying a house.

You can ask the following questions to your estate agent:

• Why has the seller decided to move?
• How are the neighbours?
• How long has the property been on the market?
• If long, why isn't it selling?
• Does the property need decorating?
• Does the property need repair work?
• Is the road busy?
• Is it noisy at night?

Use an Estate Agent or Buying Agent

Using an estate agent or buying agent could be hugely advantageous during your property search. Both options can save you time and act on your behalf to the seller. However, there are some differences between estate agents and buying agents. Here is what you need to know:

Estate Agent

Using an estate agent is a free service for buyers as they are acting in the seller’s interest. This means that their main goal is getting the best deal for the seller. While this may hinder you when it comes to negotiations, estate agents should have a wealth of knowledge when it comes to the property. This means that they should be able to answer any questions you may have.

Buying Agent

Buying agents solely act on the buyer’s behalf. They will negotiate on the buyer’s behalf and ensure that the buyer gets the best deal. Since the buying agent is hired by the buyer, they charge fees for their service. Most buying agents will request a retainer fee and then charge a percentage of the house price. The specific charges vary depending on the buying agent, but it’s important to bear this in mind when hiring a buying agent.

How Much to Offer on a House?

When submitting an offer, always begin with a figure that is well below your maximum budget. Most people make an offer that is between 5% to 10% under the asking price. This is because sellers are aware of this tactic and put their house on the market for more than the actual property value.

However, it’s important not to make an offer that is too low or too high when submitting your first offer. Alternatively, if you go in too high, you’ll miss out on getting it for less. Remember, it is common for buyers to negotiate after offer has been accepted. On the other hand, sellers are not allowed to alter the asking price once they have accepted an offer.

Here are the different options you can choose from:

Guide Price

A guide price is a minimum amount that the seller wants to accept. If you are in a seller's market, this can cause bidding wars among buyers. It can cause buyers to offer well above the stated price. It’s important to note that the guide price can be negotiated meaning that buyers can offer under in the hopes of saving some money.

Cheeky Offer

A cheeky offer is an offer that is between 10-25% under the asking price. Make sure that you consider the housing market and the competition you are up against. If you make an offer that is extremely below the asking price, the seller may disregard you completely.

Holding Deposit

Holding deposits, also known as holding fees, is a deposit paid through the estate agent to the seller. This reserves the property prior to the exchange of contracts. The holding deposit is then paid back to the buyer once the contracts are signed. It's important to note that holding deposits are unusual and often fraught with problems.

Sealed Bids

A sealed bid sees potential buyers submit offers in a sealed envelope. The buyer who submitted the highest offer wins the auction. Sealed bids can be risky as the potential buyers have no idea how much other buyers are offering. Depending on the market, this can spark a bidding war and buyers may feel tempted to offer more than their budget allows. Therefore, make sure you have a clear budget beforehand to prevent this from happening.

What Does Offers Over Asking Price Mean?

Offers over asking price means that the seller will not accept an offer below the stated price. This price tends to be below what the home is actually worth in the hopes that it will encourage a bidding war among potential buyers.

Buyers should calculate a budget and ensure that they have a maximum amount that they are willing to offer in case there is a bidding war.

Sellers may do this if the market conditions are in their favour or if they are in no rush to sell. You may want to consider offering over asking price if you want a quick sale.

If it is a seller’s market, it may be competitive for buyers to successfully make a purchase. Work out what your maximum offer will be and make sure you don’t get carried away by bidding more than you can afford.

Handling Counter-Offers

In many cases, the seller will return with a counteroffer to your original offer. This will usually be lower than their asking price but higher than your offer in the hopes of finding a middle ground. As the buyer, you have several options to consider. Make sure that you receive advice from your estate agent or buying agent to gain their professional insight.

Accept the Counteroffer

Most will be surprised at how long it takes to buy a house once offer is accepted. Therefore, the quicker a deal is done the more time you can potentially save. Therefore, if you find the counteroffer fair, it is recommended to accept the offer and begin the conveyacning process right away.

Reject the Counteroffer

You can try to pressure the seller to lower their counteroffer by rejecting their offer outright. If you think that your initial offer is fair, you may not want to negotiate any further. Bear in mind that this means you could lose the sale if the seller does not wish to go any lower.

Renegotiate a New Counteroffer

You can submit another counteroffer in response to the seller in order to come to a final price that both parties are happy with. It’s best to express your reasoning in writing so the seller can understand from your point of view. This will help prevent a difficult situation although it can take a lot of time.

Steps to Making an Offer and Getting it Accepted

Once you have completed your initial research, you should have everything you need to submit an offer. However, there are various factors you need to consider before submitting an offer. Here is how you need to make a successful offer:

1. Put in Your Offer via Your Estate Agent

Your estate agent should communicate all offers to the seller on your behalf. You should not put in an offer vocally without approval from your estate agent. The seller is more likely to take you seriously if your estate agent communicates on your behalf.

2. Leave Room to Negotiate

Utilise your estate agent and their negotiation skills as they are there to help advise both you and the seller. Sellers will usually put their houses on the market for between 5% and 10% above the property’s actual value. This is because it is common for buyers to offer a lower price to begin the negotiation process.

Don’t go straight in with your maximum bid as, if the seller comes back with a counter-offer, you won’t be able to go any higher. Be realistic with what you can afford. Alternatively, if you go in with a lowball offer, the seller may disregard you completely.

3. Be a Serious Buyer

Sellers are more likely to accept offers from chain-free buyers compared to those on the property chain. Chain-free buyers include first-time buyers and cash buyers. This is because first-time buyers don’t have to worry about selling a property and cash buyers don’t have to worry about getting a mortgage.

When submitting your offer, make sure the seller is aware of your financial position as this will go in your favour.

Read more about Solicitors for First Time Buyers

4. Be Prepared if Selling and Buying at the Same Time

Those who are buying and selling at the same time will stand a better chance if they have accepted an offer on their property beforehand. This shows the seller that you are ready to go ahead with the transaction.

Read more about Making an Offer on a House Before Selling Yours

5. Talk to a Conveyancing Solicitor

Having a conveyancing solicitor in place before you make an offer ensures that they are ready to be instructed once your offer is accepted. Your conveyancer will provide you with sound advice on the conveyancing process and what to expect. This will put you in a stronger position with the estate agent and the seller. You can use our Conveyancing Fees Calculator to find out an estimated cost. Keep in mind that conveyancing solicitors in London will cost more compared to other cities in the UK.

Read more about the Conveyancing Process for Buying a House

What Happens After My Offer Has Been Accepted?

Once your offer has been accepted, you can ask the estate agent to remove the listing from their own website. This is the best choice for those who have offered their maximum budget as it will ensure that no other party can make an offer on the property. However, your estate agent may decline to do this and keep the property online in case a higher offer comes in. This is known as gazumping.

Asking the sellers to stop marketing the property to avoid being gazumped will indicate you’re a serious buyer and ready to go. You will need to make your offer subject to survey because if your property survey shows any damage to the condition of the house. You can then further negotiate the price after bad survey results.

Remember, the purchase isn't legally binding after the offer has been accepted. A Memorandum of Sale will then be drafted by the seller's estate agent. The sale becomes legally binding once the contracts have been exchanged. You can’t back out of buying the house after this stage without potentially losing your deposit.

Read more about Negotiating House Price After Offer Accepted

Finding a Conveyancer

At Compare My Move, we can connect you with up to 6 licensed conveyancers. Simply fill out this comparison form and you can compare quotes and save money on your conveyancing fees.