How to Make an Offer on a House: 9 Easy to Follow Steps

You’ve found the house of your dreams. You are already picturing yourself enjoying the garden, choosing new carpets and showcasing your culinary skills in the kitchen. If only it was as easy as finding the house and just handing over some cash to the seller. There is way more to do before you get your hands on the keys, and today, we focus on the offer. Perhaps the biggest of the first steps you take on the house buying timeline.

5 Steps to follow before making an offer on a house

We’ve put together five steps that could help strengthen your position when it comes to making an offer on a house. Follow these and you could well find the amount you pay for a home is less than you first thought!

1.      Research and prepare

Research house prices in the local area and see if your chosen property aligns with those or if it seems suspiciously cheap or vastly overpriced.

Don’t just take the prices from the estate agents though, dig a little deeper and see what they actually sold for by looking at the Land Registry. This way you’ll get a clearer indication of what houses are truly exchanging hands for. It might also pay off to have a look at how long the sales are taking. Sellers love to sell their house fast, it cuts out much of the stress and allows them to move on. If things are moving slowly, it could be for two reasons. One, the seller simply won’t budge on price. Two, the survey has picked up issues and seen multiple buyers pull out. If you see that a house has been on the market for a long time, a low offer is definitely a good starting point.

2.      Secure an agreement in principle

You’ll need to know if you can afford the home. Secure a mortgage agreement in principle from a broker or lender.

The mortgage in principle, also known as an agreement in principle, is a sign of what a lender might be willing to let you borrow. Whilst it’s not an official mortgage offer, it gives sellers and estate agents a little more confidence that you are a serious buyer and that the funds shouldn’t be a concern.

3.      Learn more about your seller’s situation

Speak to your estate agent about the seller. Learn a little about how long the home has been on the market, and whether they want a quick sale or are happy to bide their time. This could give you a good sign of what kind of offer to make.

If someone has had their house listed for a considerable length of time, it might well be that they have overpriced it, and nobody has been able to successfully negotiate with them. It could also be that problems have been identified with the home that makes it difficult to sell. By finding out little snippets of information like this, you can use them to your advantage when you come to make your offer.

4.      See what advantages your situation can bring

Even though you are buying a house from someone else, the seller might see your situation as advantageous to them. If you have no chain, are a cash house buyer or have a mortgage already approved, they might see more benefit in selling to you.

Freeing the seller up from the complexities of a chain or giving them the benefit of an instant cash sum means they can feel much more confident in the sale. Whilst this isn’t always an option for everyone, if you can provide cash upfront or have no chain, you’ll be in a good position when it comes to making an offer.

5.      Decide your strategy

You could go in with a low offer and leave yourself room to negotiate. You’ll possibly snap up the home for a better price too. Alternatively, go in high and remove the competition. However, you could end up overpaying!

This is an important decision to make. A low offer means you can gradually raise your offer and stay within your budget. Potentially securing the home and spending less than you thought you would. You could also see yourself eclipsed by someone outbidding you quite easily.

The alternative is to go in with your maximum offer first. This could scare off any other potential buyers and leave you as the only party likely to get the home. This might secure you the home, but you might be paying more than what it would have sold for if you had negotiated from a lower starting point.

Making an offer on a house: The process

With a strategy in place, research completed and an agreement in principle secured, you can now start to move forward with making an offer on the property. Just like above though, it’s vital to follow a few steps to ensure you do things right, and with the best likelihood of success.

6.      Submit an offer to the estate agent

Send an email to your estate agent detailing your offer, and your position as a buyer. This means letting them know if you are in a chain or a first-time buyer.

Don’t offer directly to the seller! Always go via the estate agent. You are welcome to phone the agent with your offer but if you are doing this, always back it up with an email. This way you can clarify each detail and ensure the agent has all the correct information. It’s worth asking them to confirm receipt of your offer too! Make sure you clarify your status as a buyer. This can hold a huge amount of leverage within your offer. A seller may see a first-time buyer as more favourable as they know there are no chains to worry about. Likewise, they might see a cash house buyer as alluring due to the fact there are no financial complications to worry about.

7.      Negotiations

Start low. Between 5%-10% off the asking price is a good start. Remain steadfast with your maximum price but flexible with timelines. Only offer what you can afford and what you believe is fair.

Sellers will often look to incentivise a higher offer by offering white goods or furnishings as a justification for the property price. Don’t let this sway you. It’s often a tactic to leave behind items they don’t want, and items that are well past their best. Remember too that negotiating is largely for the seller and not you. They don’t care how you handle the other costs associated with moving house; they just want their house sold! Keep this in mind when negotiating as you’ll need to cover more than just the purchase costs should you get the house.

8.      Proof of funds

To make sure your offer is genuine, you’ll need to show the estate agent proof of funds.

9.      Acceptance

If your offer is accepted, you’ll normally hear from the estate agent very soon. If you haven’t heard after 2-3 days, it’s likely your offer was rejected but you can always double-check with the agent.

With the offer accepted, you are almost there. The move isn’t legally binding yet as contracts haven’t been exchanged but you can ask the seller to remove the property from the market, so it is no longer advertised.

A few days later, you’ll get a letter of acceptance from the estate agent, and you can then move forward with getting the mortgage confirmed and getting a solicitor to sort all the legal aspects of the purchase.

And that’s it. You’ve made an offer on a house. The thing is, it’s simple in theory but in reality, there are a few more things worth taking note of. That way you can finesse your strategy and ensure you do things by the book.

What’s a sealed bid?

If your estate agent told you that you need to make your offer via a sealed bid, things are quite secretive. You simply submit an offer to the estate agent in an envelope. All offers are kept secret with only the buyer able to see them at the end of the process. They then settle on an offer they want to accept. Nobody can raise their bid meaning you are left in the dark for quite some time.  If you are making a sealed bid, think about avoiding round numbers. A property selling for £250,000 is likely to see someone come with a bid of £240,000, you could jump ahead by simply going with £240,040. And that could make all the difference.

What’s an open bid?

An open bid is pretty much the reverse of the sealed bid. Where a sealed bid kept all offers secret, an open bid allows much more transparency. With an open bid, the estate agent will tell you what other offers have come in and whether there is a price the seller is happy to accept.

Can I offer well below the asking price?

You can, but you should be careful. If you decide that 15-20% lower than the asking price is reasonable, be prepared to get turned down pretty fast. This could not only see this particular offer rejected but could also see the seller refusing any offer you make as the first was so offensively low!

However, sometimes a low bid of this type may be exactly what secures the home. Low offers are often accepted when:

• The home has been on the market for a long time.
• The seller wants a fast sale.
• There are few buyers interested.
• Your proposed date aligns with their needs.
• The estate agent pressures the seller.

Could I make an offer on a house that has already sold STC?

Yes. At this stage, a sale isn’t legally binding so you can jump in with an offer. It might not be accepted but you can certainly try. The estate agent will have to pass the offer on to the seller, it’s a legal requirement. Whether it is accepted though is down to the seller.

Making an offer on a house seems quite a long-winded process but it can all move along quite quickly if you time it right and have prepared as much as possible in advance. Sometimes, the chance for you to buy a house is disrupted by people not willing to buy yours. Why not bypass that by speaking to us? At Sell House Fast, we buy any home, regardless of location, condition or type. With a process that can be completed in a timeframe that suits you, your sale happens as and when you want it, enabling you to proceed with your property plans at your pace, and not that of a complicated chain. Contact the Sell House Fast team today to find out more.