Putting an offer in on a house can be as simple as asking your agent to do so, but in reality, there is a lot more to it than just the act. This week in the O'Flynn estate agents blog, I wanted to go through some of the considerations and actions to make, so that you are placing yourself in the best place possible for securing the house that you want.
Research is needed
It goes without saying that you are going to give the offer some consideration before doing so, but I am still going to say that you should absolutely do the research on the area you are looking to buy in, looking for similar houses. Keep a spreadsheet of the prices that similar houses went for and what year/month they sold and help this to come up with your offer price. You can use Rightmove to assist here.
Negotiation needs some room
Remember that it is not unusual for a person selling their home to put on an extra percentage knowing very well that it is not uncommon for people to come in under the asking price. What this means is that there will nearly always be room for negotiations, so don't jump in with your absolute, final offer. Build up to this and you may find that it is not necessary to go to the levels you originally thought of. By the same measure be reasonable with what you can afford.
Do you have your mortgage in principle in place?
Before putting in an offer you need your finances in place, so don't assume they are, or hope they are, be sure they are. Failing to do so is unfair to everyone involved in the process and chain of events and will only lead to misunderstanding and disappointments. Especially in the current climate with the rise in interest rate, ensure that you have sourced the very best deal through an independent mortgage advisor. If you need assistance in this area, we can recommend some fantastic mortgage advisors.
What advantages do you offer in this situation, do you have a large deposit? can you move quickly? are you chain free? Whatever advantage you can bring, let it be known to the parties involved, and this way a competitive edge can be formulated. Also, my advice is that if it is the home owner that is showing you around their property on your initial viewing, try to build a rapport with them. It really puts you in a strong position, especially if they are getting a lot of interest on their home with potential multiple offers coming in. This will make you stand out for all the right reasons.
How to submit the offer
All offers should come through your agent, they will talk to the seller or their representative and come back to you on the decision. Put your offer in writing to your agent is always my advice. You really want a chain, proof, that this figure you want to put across is the one that is put across. You could even add the parts about why you feel you add a competitive edge to the process, this could make you stand out especially if several figures come in at the same level.
What level should you go in at?
As discussed earlier some sellers will put the house above its actual valuation, so when coming in with an offer, after you have researched it, one method is to come in between 5 and 10 % lower which opens the conversation and allows people to find their feet. Don't come in too low as this can often cause offence to the owner or they may not consider you a serious buyer. Do your homework locally and if you are coming in lower than the asking price give reasons for why are you doing so. Also, be clear on your maximum offer and stick to that. I've heard instances from buyers who have said that they are making unrealistically high offers on houses in the expectation that the property gets down valued further down the line. My advice is, please do not consider doing this, a, it really doesn't sit well with the estate agent or home owner and b, it's a gamble that may not pay off and finances maybe lost.
Does my own property need to have sold before my offer goes in?
This is a very common question and the answer is no, but how seriously will you be taken if you are relying on the sale of your home to finance the move? The homeowner is unlikely to accept your offer and remove it from the market until you have a sale agreed on your property, however you have made it clear to the homeowner that you are serious about their property and they can consider you further down the line. Even if your home is not on the market, it's worth getting it valued so that you have a better picture of your finances.
What happens if my offer is accepted?
First thing first. We need to ensure that no more interest in the property is garnered, so we ask for the house to be removed from all marketing (subject to full financial qualification). Offers are often subject to a survey because if the house comes back with underlying conditions or gets down valued for mortgage purposes, you may wish to re-consider your offer. Nothing is legal as this stage, that occurs when contracts are exchanged which is usually weeks further down the line from here.
That concludes the process of putting in an offer on a property, there are of course other steps ahead to complete the sale which we will revisit in a future blog. As always if you want to discuss the potential selling of your home reach out to us here at O'Flynn Estate Agents for a friendly chat.