Making an offer on a property

This stage of the homebuying process was very exciting! Finding a property that you love and deciding what offer to make was definitely one of the highs in the process!

Here’s our experience of making offers on properties:

Property 1: Offer made and then we withdrew the offer.

Property 2: Offer not accepted.

Property 3: First offer rejected. Second offer accepted but transaction fell through due to cladding concerns from the lender.

Property 4 (our new home!): First offer accepted.

I still remember the nervousness and excitement from when we made the offer on our home! I had butterflies in my stomach as we waited for a response which was followed by the feeling of elation when the offer was accepted.

What no one told us was what a rollercoaster ride of emotions this part of the process would be. We definitely weren’t prepared for it when we made our first ever offer on a property. That day was full of excitement, anxiety and stress. Lots of stress. 

If you want more information on what preparation we did beforehand, I’ve written about it here:

·      Learning from our mistakes and the initial preparation needed

·      Questions to ask before making an offer (for new builds, click here)

·      Research that we did before making an offer

What we found particularly useful when deciding on the offer value:

·        We looked at sold prices of similar properties in the area.

·        Throughout our search, we read news about the current property market. At the time that we were looking there was uncertainty because of Brexit. The UK House Price Index shows house price changes which could be useful. When we were looking, London saw an annual price fall of 0.4%.

·        At property viewings, we asked estate agents what the market had been like from their experience over the past few months and whether offers they had received recently were lower than the asking price and if so, by how much. Be aware though that this may not be accurate but some information is better than no information! 

     Also, if you ask multiple estate agents, at least you would have a rough range or see if the percentage below asking price is consistent!

·        We always asked the estate agent:

-       Why the owner was looking to sell?

-       Have there been offers made previously? Why didn’t the owner accept the offer?

-       How long has the property been on the market?

-       Are there any plans for the local area (e.g. changes to the roads, new cycle lanes, new developments?)

-       What are the timelines for sale of the property?

For more information on why we asked these questions, please see this post.

·        For new builds, we asked the estate agent if a discount was possible and for an idea of what developer would accept. 

     On the two new builds we made an offer on, our purchase price was 6% lower than the listed price! They were usually able to guide us to a number or if we had a suggestion of what offer we would be interested in making, they were able to let us know if they felt the developer would accept or not.

·        Prepared ourselves for having to make a second offer. This involved agreeing beforehand with hubby what the next offer would be and what the maximum amount we would offer.  

     For property 3, when the first offer was rejected, the estate agent was able to guide us on what he felt the next offer needed to be for him to persuade the developer to accept it. Luckily that was in line with what we planned our next offer to be!

·        For new builds, review the price list carefully to see if the other plots are similar in price.  For us, we spotted that the property below the one we wanted had a list price which was significantly lower. This was odd as they were the same layout, number of bedrooms and size! Whilst we had seen that the apartment price increases the higher the floor, we had never seen such a significant increase. After enquiry with the estate agent and developer, it was confirmed that there was an error in the price list. When we made the offer, we took that into account.

Please don’t forget that making an offer is different for everyone so you might find other approaches more useful and so I’ve included useful links I had referred to previously for guidance!

HomeOwners Alliance: Making an offer - and haggling over the price

Which?: Making an offer on a house or flat

Homes & Property: How to make an offer on a house to bag the best deal

HSBC: How to make an offer on a property

What to actually do when making the offer?

From our experience, we would call the estate agent and verbally make the offer and follow up straight after with a written offer sent via email.

This is what we wrote for a property which wasn’t a new build:

Hi X,

We would like to make an offer of £XXX for the property at <insert full address of property> subject to contract and survey.

Please let the owner know that we are chain free and already have an agreement in principle for a mortgage.

If the owner accepts our offer, please take the property off the market so it can no longer be viewed.

Thanks,

For new builds, this is what we sent:

Hi X,

We would like to make an offer of £XXX for plot XXX <Insert Address> subject to contract and survey (inclusive of all fixtures, fittings and white goods in the flat).

We are <insert job profession> who are chain free, have an agreement in principle and our finances ready.

We already identified a solicitor for the conveyancing process but are happy to use one of the recommended solicitors to ensure a quicker and smoother conveyancing process.

If the offer is accepted, we will pay the reservation fee to take it off the market.

Thanks,

For the new build one, that was more recent and you'll see we added more information about our position too and that can also be included when making an offer on properties that aren't new builds.

I also found some wording shared on MoneySavingExpert.com too.

Wishing you a smooth home buying journey!

Jess