Congratulations! You’ve finally found the home of your dreams and want to submit an offer, but are unsure how to go about it and how much to offer in the current housing market.
Buyers typically pay a 10% deposit, which is £29,200 when purchasing a property at the £292,000 UK average price.
We'll take you through the offer process, so you can be as prepared as possible. We've also added a handy glossary at the end to for definitions of confusing, legal terminology.
Before Making an Offer
Arrange an Agreement in Principle
An Agreement in Principle (AIP) is a statement from a mortgage lender that gives you an initial idea of how much you could borrow.
It is not a legal requirement, but having an AIP before making an offer demonstrates to the seller that you are ready to begin formal proceedings. This can give your offer more weight in competitive situations.
Hiring a mortgage broker to process your agreement in principle takes away a lot of stress and time. They can offer expert advice, so you can submit an offer that is more likely to be accepted.
Research Sale History
Look into how many times the property has been sold. If there are multiple transactions, this could present red flags such as structural problems and issues with noisy neighbours. Ask yourself the following questions:
- Are there any factors or trends in the current housing market that affect the property? (such as Stamp Duty holidays)
- What are the seller’s circumstances?
- How long has the property been on the market?
- Why is the property struggling to sell?
- Does the property need decorating?
- Does the property require extensive repairs or renovations?
Consider the Housing Market
Understanding the current market means you'll be prepared going into negotiations. When looking at how competitive the landscape is, consider whether you are buying in a buyer’s or seller’s market.
A buyer's market means you will have the upper hand in negotiations as the seller is likely struggling to sell the property. Seller's markets flip this and mean you will face a lot of competition from other prospective buyers, and you may not have as much wiggle room when deciding your offer.
Research the local property market, especially houses that have the same number of rooms and features in the area. Websites like Rightmove and Zoopla are the best resources for current property listings and sale history.
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How Much Should You Offer?
You should offer an amount you are willing to pay, and think is fair. A lot of people think they have to offer under the asking price, but you should only do this if you believe the property is worth this cost.
If you do plan on offering under the asking price, make sure you are prepared to justify this to the estate agent and/or seller.
Types of Offers
| Offer Type | Typical % Range | Amount Offered |
|---|---|---|
| Asking Price | Up to 5% below asking | Up to £277,400 |
| Guide Price | 5–10% below asking | £262,800 - £277,400 |
| OIRO | Up to 10% below asking | Up to £262,800 |
| Cheeky Offer | 10–25% below asking | £219,000 - £262,800 |
| OIEO | 1-3% above asking | £294,920 - £300,760 |
| Sealed Bids | Around 34% above asking | Around £391,280 |
*These examples are based on the £292,000 average property price.
Asking price and cheeky offers are the most common types of property purchase and offer more room for negotiation, whereas guide prices and sealed bids are popular in London, where there is high interest and demand.
Your mortgage broker will consider the offer type when advising on what your best initial offer should be.
What Is A Cheeky Offer On A House?
A cheeky offer is when you put in a bid for a property that is substantially lower than the asking price. An offer that is only 75-90% of the asking price is considered 'cheeky'.
Buyers will submit a cheeky offer if they can justify that extensive work is needed on the property. However, some submit a cheeky offer to see how low they can purchase the property for, but this does run a risk of insulting the seller and a subsequent refusal to counteroffer or negotiate.
Sellers are more likely to consider or accept a cheeky offer in the following scenarios:
- They want a quick sale
- The property has been on the market for too long
- You provide strong evidence and reasoning to justify your offer
How to Actually Make an Offer
1. Inform the Estate Agent
You can submit your offer verbally, but writing it in an email means there is a paper trail to refer to throughout the conveyancing process.
2. Justify Your Offer
If your offer is below asking, include why this is the case in your offer email. Sellers are more likely to negotiate if the buyer has done their research and can back up their low offer.
3. Discuss Your Position
Sellers will gravitate towards chain-free parties, including first-time buyers and those buying with cash. Essentially, anything that can move the process along a bit faster will be considered favourably.
If you are buying and selling at the same time, make sure to mention whether your property has sold.
4. Be Ready for Negotiations
You can't anticipate the seller's reaction, but establishing a maximum budget and non-negotiables in advance ensures you're streamlining the conveyancing process and not wasting time making decisions.
5. Find Your Conveyancer
Having your conveyancer on hand when submitting your offer means you can instruct them straightaway when your offer is accepted. Take time to research the market and use sites like Compare My Move to connect with conveyancers.
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What Happens Next: Possible Offer Outcomes
Your estate agent should communicate all offers to the seller on your behalf, and you should not put in an offer vocally without their approval. The seller is more likely to take you seriously if the estate agent communicates on your behalf.
Here are the possible outcomes:
Offer Accepted – Now What?
This is the best-case scenario and marks the beginning of the conveyancing process. Once your offer is accepted, you must instruct your conveyancer, who will arrange searches.
You should also book a surveyor as soon as possible, which highlights areas of concern in the property. These findings can then be used to renegotiate your offer if any reparations are required.
Read more about what happens when your offer is accepted.
Counteroffer Received – What You Can Do
This is the most common outcome as sellers anticipate lower offers, so they’ll respond with a counteroffer, hoping to find a middle ground. As the buyer, you can choose from the following options:
- Accept the counteroffer: This gets the ball rolling immediately, potentially saving you time and money. If the counteroffer is fair, there’s no point trying to get some money off just for the sake of it, and you’ll find it easier to negotiate with the seller after your survey.
- Reject the counteroffer: You can refuse the counteroffer if you believe your initial offer is fully justified. You can explain exactly how you have come to the price, and there is a chance the seller may concede if they are struggling to sell. However, you also run the risk of the seller pulling out and refusing to continue negotiations.
- Renegotiate the counteroffer: You can begin a back-and-forth until you come to an amount you are both happy with; however, as with the above point, the seller may become frustrated and pull out.
Offer Rejected – What’s Next?
Having your offer rejected with no counteroffer isn’t a common occurrence, but it can happen when it is a seller’s market and there is a high level of interest in the property.
Those with enough in their budget could submit an increased offer that reflects what the seller is looking for. If this isn’t an option or you don’t want to pay more than what you offered, then take this as a learning experience and continue your property search.
Walking away from the transaction is disheartening, but your conveyancer can provide advice on how to move forward. The seller’s estate agent may also have alternative properties in the area that are more suited.
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*All data, unless otherwise stated, is based on the average service cost data for Compare My Move users in addition to our own research. See how our data works.
FAQs
How Do You Negotiate a House Price?
The best way to negotiate is to start low when submitting your initial offer, even if it is a seller's market. You don't want to go too high as this will leave you no room to negotiate, and the transaction will fall through. Make sure you increase or decrease your offer in small increments, as you don't want to come across as unreasonable.
Can You Put an Offer on a House Without an Offer on Yours?
You can submit an offer at any point, even before you've accepted an offer on your own property; however, sellers aren't likely to accept due to the risk that your sale may be delayed or fall through.
Can You Lower Your Offer on a House?
It is possible to lower your offer, especially after your survey. This is known as gazundering and is a common tactic during the negotiation and enquiry stages before the exchange of contracts.
Read more on how to renegotiate after receiving negative survey results.
Can You Put an Offer on a House that is SSTC?
You can put an offer on a property that is Sold Subject to Contract (SSTC), which is also known as gazumping, as the transaction isn't legally binding at this point.
Are Cheeky Offers Rude or Disrespectful?
Cheeky offers are not supposed to be rude or disrespectful. However, if you want to offer below 10% of the asking price, it’s best to have justifications as to why you are doing so.
Glossary of Terms
| Term | Definition |
|---|---|
| Agreement in Principle | A document that estimates how much a buyer can borrow when taking out a mortgage. |
| Asking Price | The amount the seller wants for the property. |
| Buyer's Market | There are more properties on the market with low buyer demand. |
| Cheeky Offer | An offer that is substantially lower than the asking price, typically 10% - 25% below. |
| Counteroffer | This is an offer made in response to another offer that has been rejected. |
| Gazumping | When a buyer submits an offer that is SSTC. |
| Gazundering | Submitting a lower offer during negotiations, most commonly after the survey. |
| Guide Price | How much a property is expected to sell for, most commonly at auction. |
| Offers in Excess Of (OIEO) | The minimum amount the seller will accept. |
| Offers in the Region Of (OIRO) | The approximate amount the seller wants, but they are willing to negotiate within reason. |
| Sealed Bids | Submitted during blind auctions where buyers lodge their offer privately to the estate agent before a set deadline. |
| Seller's Market | Properties are scarce, but buyer competition is high. |
| Sold Subject to Contract (SSTC) | Refers to properties that are undergoing the conveyancing process but have not reached the exchange of contracts. |
