How to make an offer on a property

Once you have found the property that you want to make your home – the next step is to make an offer.
Here’s how to do it…

Step 1: Do your Homework 

• Make sure you do some research first. Check what the property is truly worth, and have a look at house prices for similar properties in the same area.
• Make a note of any obvious faults or repairs that you saw when you viewed the property, as you can use this to justify a lower offer.

Ask the estate agent these questions:

• How long has the property been on the market? If it’s been on for a few months then you can perhaps go in with a slightly lower offer than the asking price
• How many people have viewed the property in the last month? You can find out how popular the property is and how to position your offer
• Why is the seller moving? Upsizing, downsizing, neighbours, work, money reasons – this will help you understand a bit more about the timescales
• Is the seller looking to move quickly? Again, this will help you figure out a timeline you can work too. The seller may accept a slightly lower offer if they need to sell quickly or you’ll find out if they are more likely to wait it out for the highest bidder.

Step 2: Know how much you can afford & work out your offer

• Get a Decision in Principle (DIP), also known as a Mortgage in Principle (MIP) or an Agreement in Principle (AIP), from your lender. You should only give a copy of this to your solicitor so that the estate agent can confirm with them that you are serious and you have the funds in place to proceed.
• Know how much you need to pay out for legal & survey fees on top of your mortgage and deposit. If the property needs work consider costs for specialist reports on property condition.
• Getting a HomeBuyer (Level 2) or Building Survey (Level 3) is essential when buying a property to ensure you don’t end up having to pay out thousands on unseen repairs.

Working out your offer:
Based on your research, you now need to work out how much you want to offer.
If the property you want needs a little bit of work, you want to go in with your first offer between 1 % and 5% less than the asking price. This gives you a bit of leeway to negotiate and increase your offer if needed.

For example, Property is advertised at £150,000
1%  less = £148,500 (£1,500 less than the asking price)
2% less = £147,000 (£3,000 less than the asking price)
3% less = £145,500 (£4,500 less than the asking price)
4% less = £144,000 (£6,000 less than the asking price)
5% less = £143,500 (£7,500 less than the asking price)

Don’t forget your offer needs to reflect the condition of the property and the prices in the local area to be considered seriously.

Step 3: Get organised

• Have your solicitor in place so you can give the estate agent their details at the same time as submitting your offer.
• Have your full contact details are written out and the best times and ways to contact you.

Step 4: Be personal to get ahead

• It helps to highlight what makes you a good buyer and why they should choose you. Don’t always assume that just paying the asking price will be enough.
• Make sure the seller knows anything that can help you seal the deal. First-time buyers, buyers with no chain and buyers who have pre-arranged mortgages will often have a head start on most of the competition, especially where the seller is in a chain.
• Write down 2-3 brief sentences on why you want the property and what you love about it. Homes are very personal and sometimes a seller will accept a buyer’s offer knowing it’s going to someone who will love it in the same way as they (the seller) did – rather than it going to a property investor, for example.

Now it’s time to make your offer

1. You can do this verbally, either in person or by phone, but…
2. Always follow it up in writing, usually by email these days, so it is kept on record.
3. We suggest you write out your email offer first – then read the main points out to the estate agent on the phone. After the phone call send them the offer by email straight away.
4. Make it clear that your offer is: Subject to Contract & Survey
   1. Subject to contract means: the final sale takes place only when lawyers have exchanged legally binding document
   2. Subject to survey means– this allows for the cost of any faults or issues to be taken into account once your surveyor has checked the property out
5. Finally, ask that the property is taken off the market and no longer advertised for viewings. This reduces the risk of someone coming in with a higher offer, known as gazumping.
6. The agent is then obliged to pass the information to the vendor (the current owner) for consideration.
7. Don’t forget to ask the estate agent for confirmation in writing (email is easiest) that they have received your offer and have passed it on to the seller for consideration.

The seller may want to haggle with you on the price so be prepared to go back and forth with a slightly higher price but do not go over your maximum budget.

Offer Template – we’ve created an ‘Offer Template’ which you can download and amend to suit your needs. Get a free ‘Offer Template’ now.

More useful information:

If your offer is accepted – you need to do 3 things
How a survey can help you re-negotiate the price you have offered
Video – What happened to one family who didn’t get a survey
Which survey should I choose?
What does it mean when my solicitor says, “We need to do the searches”?