First time buyer’s guide: offer & negotiation
Making an Offer
Does the property fulfil your criteria and its location?
This is by far the most typical manner of selling your home in England and Wales. Your property is advertised with a set request price that invites customers to match – or at least create an offer in the area.
How do you submit an offer? Offers can be made to the estate agent by telephone or in person. There is no set date for the submission of bids.
Anything else? It’s not uncommon to develop completely into something else for this conventional manner of selling. If there is a great deal of concern, estate agents may decide instead to ask customers for the best and final deals.
If you believe the property needs a lot of work and you don’t think the cost reflected this, you may consider negotiating. If the property has been on the market for a long time, you could also consider this.
If any of the following applies to you, be sure to let the agent know. It might create the difference between accepting your offer or someone else!
- You’re a first-time buyer
- Your mortgage offer is arranged
- You’re not in a chain
Before you make an offer, find out what the position of the seller is.
They may be prepared to accept a reduced offer if they have had the property on the market for a long time.
On the other side, a vendor who is not in a hurry to move might be more willing to hold out for a higher offer.
It will rely on many factors to decide what to offer on a house or flat. The present market, the prices of adjacent properties and the situation of the building all play a role. You should also closely believe about what you can afford realistically, though. Will you be financially crippled by the asking price?
Don’t make your original offer the mistake of low-balling. In all probability, that ‘ cheeky offer ‘ will be rejected outright and forever colour you in the seller’s eyes. Remember, it is up to the seller to whom they sell, and if you get off on the wrong foot, they may choose to exclude you completely from running.
To a seller, a buyer’s financial situation is likely as crucial as their offer – after all, they need to be sure that you’re going to see your offer through to completion.
Whether you’re in a chain or a cash buyer, getting your affairs in order before you put in an offer is essential. Be organized. If you’re in a chain, ideally, you’ll have your present home customer lined up – If not, consider withdrawing a bridging loan to give you the money you need while selling.
An organized buyer is a serious buyer in the eyes of a seller – one that will be motivated to do all it takes to push the sale to the end.
Be prepared to lose out
You’ll never understand who you’re up against when it comes to purchasing your next home. If you bid below asking price while another buyer is offering more, you are almost certainly going to be pipped to the post.
Take it from us: unless you’re ready to lose your new home, don’t create an offer below the price you’re asking for.
Renegotiating the property price after survey
You may want –or need to –renegotiate your property price depending on the results of your survey. If your surveyor discovers any issues with the property, it may influence its valuation and, in turn, the amount your mortgage supplier is prepared to provide you with.
Whatever your situation, for your new home, you won’t want to pay over the odds. If the property in question requires structural work worth £ 5,000, should the vendor decrease the request cost accordingly?
Unfortunately, it’s not as clear cut as this.
After the survey, your vendor has no legal duty whatsoever to decrease their request price. You’re absolutely within your rights to renegotiate with them, though – at least try.
So, after your survey, how should you negotiate the home price? You could go through a number of distinct ways. You could ask the seller to decrease their cost to cover the job as a whole. However, this is a risky gambit and if they have had other interest in their property, they are most likely to refuse – or worse, pull out of the sale, leaving you out of the pocket for the survey.
Instead, you could offer to meet them halfway – ask them to mildly drop their asking price to assist you afford the job you need. But again, there is no duty on your seller to do this.
Whatever you decide to do, make sure that you first check with your estate agent and they can advise you on which course to take.
When your offer is accepted
You will have to officially apply for your mortgage and organise the surveys. It is at this stage that things are moving mainly for both buyer and seller to the Solicitors ‘ hands.
Your solicitor starts the legal process for transferring the property to you, which is called conveyance, and involves arranging stamp duties, communicating with the Land Registry, transferring the cash, and acting as a point of contact between you, the seller and the mortgage lender.
When you can take ownership of your new home, you will then be asked to approve the conditions of the purchase, including a completion date.
You are legally bound to purchase the property when agreements are lastly exchanged. This is the point where your deposit will need to be put down.