Making an Offer on a House 2020
Written by Martha Lott
22nd Nov 2019 (Last updated on 3rd Apr 2020) 7 minute read
Making an offer on a house can be daunting, especially if you’re a first-time buyer. But there are ways to make your offer stand out and seem more appealing to the seller. By doing your research and presenting yourself as a serious buyer, you’ll definitely peak their interest.
Knowing the reasons behind your offer and writing a letter to the seller can make your offer stand out from the crowd, giving you more of a chance of being accepted. Once your offer is accepted, you will need to compare conveyancers and then instruct them to begin the conveyancing process.
Compare My Move have put together this guide on everything you need to know about making an offer on a house, from how much to offer to how to get it accepted, we’ve covered it all!
How to Make an Offer on a House
You should spend some time considering your offer and the reasons for why you’re making it before committing to the decision. Here we’ve listed our top tips to successfully make an offer on a house. Remember, there are many different ways to buy a house, so each method may require a different bidding or offer process. Talk to your conveyancer for their expert opinion. Remember, at Compare My Move we already have a network of verified conveyancers.
From the importance of doing your research to how to look like a serious buyer, we've provided a few suggestions to contemplate.
1. Do Your Research
Research the area and any similar houses that have the same number of rooms and features. Find out how much they sold for and try to base your offer around this. If you made a notes during your house viewing, then don't forget to include those too if you found any defects or potential issues.
You should also find out if the seller has received other offers on the property, how much the offers were and why they were declined. You can then factor this into your decision, as well as into the total cost of buying a house.
Sellers will usually put their houses on the market for 5-10% above the property’s actual value as it’s common knowledge that buyers will first offer a lower price to begin the negotiations process.
Start with a low offer as you can always increase it if it’s not immediately accepted, but you can’t decrease your offer if you go in too high and potentially lose out on a better deal.
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.
3. Have a Mortgage in Principle
To let the seller know you’re a serious buyer who doesn't want to waste valuable time, start your mortgage application before you look at properties. If you make an offer and don't have a mortgage in principle, the chances of the offer being accepted or even taken are slim. Sellers are looking for a quick transaction and having this ready will help convince them that you’re a serious buyer.
4. Arrange a Date for Moving
You should have a rough idea of a date that you’d like to complete and move on. This will give the seller more reason to accept your offer and trust you as a buyer.
5. Let Them Know You’re a Serious Buyer
Explain why you offered the amount you did, how you factored in other houses nearby and their sold prices. If you offer a low amount, consider explaining the reason why. Perhaps the house needs serious repair work that will affect its value. This will prove that you’re serious about buying the house, therefore your offer will more likely be accepted.
It’s also worth letting the seller know that you have your finances in place and are ready to start the conveyancing process. This way, you will be taken more seriously as a potential buyer.
6. Be an Attractive Buyer
If you’re a first-time buyer, are not part of a property chain or are a cash buyer, you’re going to have an automatic advantage over other buyers as this will likely be a quick conveyancing process. Highlight these facts about yourself and make them well known.
How to Put in Your Offer
Putting an offer on a house doesn't have to be complicated as it's mainly done through an estate agent. However, you're main concern should be collecting evidence supporting your offer. You should always put your offer in writing through an estate agent, whether it’s a letter, email or a recorded telephone call, this will then act as evidence. Don’t put in an offer vocally without any proof of you agreeing to this with the estate agent.
To make your offer stand out even more, write a letter to the seller detailing why you want to buy their house and the reasoning behind your offer. This will be a more personal approach, allowing the seller to get to know you a little bit, making you stand out over other potential buyers.
How Much to Offer on a House
You may now be wondering how much to offer on a house. Well, the majority of people will usually put their first offer in at 5-10% below the asking price as a lot of sellers will price their houses above the actual valuation of the property to make room for negotiations.
Don't go in too low or too high for your opening bid. If you make an offer that’s way below the asking price, you won't be taken seriously. Alternatively, if you go in too high, you’ll miss out on getting it for less.
Work out what your maximum offer will be and make sure you don’t get carried away, bidding more than you can afford.
How to Make an Offer on a House That's Below the Asking Price
It’s normal to make an offer on a house that is below the asking price. Typically, many buyers will offer a price that is somewhere between 5 and 10% below the asking price. Any offer that is unrealistically low will immediately get declined and you could be ruled out from trying again.
Research from Clear Score discovered that 22% of sellers would accept an offer that is 5% under the asking price only if the buyer wasn't part of a property chain with a mortgage in place. Another 52% of sellers would considering taking a lower offer, meaning you do have a good chance if you argue your case.
If you’re looking for properties worth over £500,000, you may have even more to gain by being prepared. We found that 88% of those selling houses worth more than £500,000 would either definitely, or at least consider, taking a 5% price cut if the buyer is chain free with an agreed mortgage.
You should provide valid reasons for offering a lower figure. Find out if there’s work that needs to be done or if any issues have been found that require repair work. You can then calculate the repair costs and take this off the asking price.
After Your Offer Has Been Accepted
Once your offer has been accepted, ask the estate agent to take down the listing to avoid future competition or disappointment. They usually keep the listing up which can then result in someone else making a better offer. This is known as ‘gazumping’.
Ask the sellers to stop marketing the property to avoid being gazumped, this will prove to the seller that you’re a serious buyer and won’t pull out of the purchase. 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 further negotiate the price.
Remember, the purchase isn't legally binding after the offer has been accepted. It’s not legally binding until after exchanging contracts when the purchase is official. You can’t back out of buying the house after this stage without potentially losing your deposit.
Save on Your Conveyancing with Compare My Move
When you’re ready to instruct a conveyancer once your offer has been accepted or once you’ve accepted an offer, simply complete our quick and easy form and you’ll be connected with up to 5 licensed conveyancers or conveyancing solicitors within seconds, regulated by either SRA, CLC, LSS or LSNI.