A Guide To Buying A House & Making An Offer | M&S Bank

How to make an offer on a house in England, Wales and Northern Ireland

Putting in an offer for a property can be nerve-wracking. But if you do your research and hold your nerve you can hope to secure your next home for a fair price. Your aim is to get your offer accepted, ahead of other potential buyers, so it pays to do some groundwork.

Before making an offer

It’s tempting to start house hunting as soon as you decide you want to move or buy, but it’s wise to have a Decision in Principle (‘DIP’) in place before you do – and if you’re selling, know what your home is likely to sell for. This means you’ll have a clearer idea of what you may be able to borrow, so you can search for properties in your realistic price range.

Deciding what to offer

In certain parts of the country, the price the property is advertised for is often not what the estate agent is expecting you to offer. Negotiation can be expected, so unless it’s a clear seller’s market, you might choose to make your first offer less than the asking price.

There are clues you can use to pitch your offer at the right level. Has the property sat on the market for a while? Chat to the owner when you view a property. You might find out they need to sell quickly, so it could be that they might accept a lower offer.

Alternatively, you might discover that they are in no hurry to sell, which could suggest they might be prepared to hold out for the asking price.

If the seller has received other offers, the estate agent can’t legally tell you what they were, but might indicate how close to the asking price they were.

Researching similar properties

Within sites like Zoopla, Rightmove and onthemarket.com, there is a wealth of information available on what similar properties have sold for in recent times – and what other homes are on the market for in the surrounding area. Sales figures are updated in due course after a sale has gone through. This means you can drill down to what neighbouring properties sold for on specific dates.

Make sure you view a number of properties so you can draw comparisons between them to get an idea of whether your chosen property’s asking price represents good value.

Rubber stamped

Remember, your lender is likely to conduct a valuation survey to satisfy them that the property’s value is in line with the amount you are borrowing. It’s common to make your offer ‘Subject to survey’. If the survey values it at less than you offered, the seller may be willing to renegotiate.

Pitching your offer

Before you make your first offer, think about what your second or even third offer might be, if the first one is rejected.

Many sellers find it hard to be impartial about their often much-loved home, which is only natural. It’s an emotional process, so you risk insulting or upsetting them if you pitch your offer too low. A cheeky offer could backfire if other buyers are in the frame too, so ask yourself if you’re being fair. Is the potential saving worth losing your dream home over?

Offering the asking price

If it’s a seller’s market, the property ticks every box for you and seems good value, it might be worth offering the asking price in the first instance. Especially if it’s a buoyant market in your chosen area.

Occasionally, you may be required to bid above the asking price to secure the property, so it’s important to factor this into your budget.

Estate agents – an insider’s knowledge

It’s good to know what an estate agent considers an attractive buyer. It’s in their interests to ensure a smooth process so they’ll naturally sway the seller towards a buyer who, in their opinion, is likely to be serious about the property and will see the purchase through. We spoke to a former west London estate agent.

“A buyer who has nothing to sell is obviously more attractive than someone whose own house has just gone or is going on the market. There’s an element of risk in any housing chain. However, if the offer is a fair one and we believe the buyer’s own home will sell relatively easily, we would be happy to recommend the offer to our client. In addition, we would always ask the potential buyer about their financing. Knowing they have a mortgage arrangement in place means they are less likely to make an offer and then be unable to borrow the funds to honour it.

“Contrary to popular belief, estate agents are not desperate to drive up a property’s price to boost our commission. A quick glance at the local market would soon mark that property out as overpriced. Estate agents like steady sales on realistically priced properties that go through as smoothly as possible, in the agreed time scales insofar as is possible. We put a lot of work into tying up each deal, so to have it fall through further down the line is a waste of time and money for all concerned. We would endeavour to hold every deal together between the buyer and the seller – negotiating fairly on any points that arise – so the outcome is to everyone’s satisfaction.”

Picking up the phone

Once you know what you want to offer, it’s a case of speaking to the estate agent. They are obliged to pass on your offer promptly to the seller, so you should hear back fairly quickly.

Remember, it’s good to have in your mind a second or even a third offer in case your first one is rejected. However, the estate agent may give you an idea of what the seller may be prepared to accept. Good luck!

What is a…

Seller’s market?

This is when the market is rising (house prices are increasing) and there are more people looking to buy than there are properties to buy in their price range. When properties are scarce, there’s a danger of people settling for something less than their ideal property.

Buyer’s market?

This is when the market is falling (prices are decreasing) or stagnating. There are plenty of properties on the market, but not enough buyers. This is when buyers can afford to be choosy and negotiate lower prices.

You might also be interested in: Making an offer in Scotland, Dealing with estate agents, Extra costs to consider when buying a home.

The material contained in this article is intended for information purposes only and not as advice.

You should obtain professional legal or other advice if you are unsure about the effect on you of any matter in this article.

Published: 26 January 2018