Making an Offer on a Property in the UK
Welcome to Week Four of our home-buying series. This week, we focus on one of the most critical stages of purchasing a home: making an offer. This step requires a strategic approach, combining market research, financial readiness, and negotiation skills. Let's dive into how you can effectively navigate this process.
Work Out Your Budget
Initial Steps:
Before viewing properties, calculate an accurate budget. Use online mortgage calculators for a rough
estimate and consult an independent mortgage broker for a precise assessment.
Mortgage Agreement in Principle (AIP): Consider applying for an AIP, but be aware it can impact
your credit report. Some estate agents might request it to verify your affordability.
Check the Market
Research: Avoid overpaying by researching the local property market.
Compare the property with similar recently sold homes in the area using the Land Registry website.
Recent Trends: Focus on the most recent sales data to gauge the current market value of properties.
Play Detective
Previous Listings: Search the property's address to find its history, including past sale prices, duration on the market, and any price reductions.
Insights: This information can reveal the seller's market experience and potentially their flexibility on price.
Talk to the Estate Agent
Gather Information: Ask the agent about the property's history, the seller's circumstances, and any previous offers.
Key Questions: Inquire about the duration of ownership, reasons for selling, market time, and the seller's readiness to move.
Check External Factors
Wider Influences: Consider factors like school catchment areas, transport links, local infrastructure plans, flood zones, and development applications.
Crime Levels: Research the area's crime statistics on the police.uk website to understand safety and community aspects.
Should I Offer Below the Asking Price?
Assessment: The asking price is a starting point. Evaluate if the offering below is viable based on market research, the seller's urgency, property duration on the market, and your buying position (e.g., chain-free, cash buyer).
Negotiation: Be prepared to negotiate. Leave room for upward negotiation, especially if the property has been on the market for a while or requires repairs.
Making an Offer in a Competitive Market
Strategy: In a competitive market, properties sell quickly. Be cautious not to over-commit to something you cannot afford and stick to your budget.
Competitive Edge: Emphasise factors in your favour, such as being chain-free or a cash buyer, to make your offer more attractive.
How to Make an Offer
Process: Make your offer through the estate agent, either verbally or in writing. Highlight your strengths as a buyer,
such as having an AIP, being chain-free, or being flexible on moving dates.
Emotional Appeal: If appropriate, express your emotional connection to the property in your offer.
Negotiating the Property Price
Tactics: Keep your budget private, play it cool, and consider waiting for a survey before
negotiating on structural issues.
Patience: Take your time to consider counteroffers, and don't offer more than you actually afford.
Sealed Bids and 'Best and Final' Offers
Approach: In situations with multiple offers, you may need to submit a sealed bid or a 'best and final' offer.
Be realistic about the property's value and avoid overbidding but make sure you don't regret not.
Conclusion
Making an offer on a property is a nuanced process that combines financial readiness, market research, and strategic negotiation.
By approaching this step thoughtfully and informally, you can increase your chances of success in securing your desired home.
Stay tuned for more insights in our series, designed to empower you as a first-time home buyer. At Putterills, we're here to support you in every step of your property journey.