Making an offer on a house is exciting but can also be extremely stressful.
Knowing what to expect can help, though, so we’ve put together this in-depth guide to making an offer on a house, which includes:
- Full details on how to make an offer and enter negotiations
- Top tips for making an offer
- Answers to common questions on making offers
- What to expect once your offer is accepted
How do I put an offer on a house?
Once you’ve found a property that you love, it’s time to put in an offer.
Here’s the process you should follow, according to our property expert Rob Smith.
1. Think carefully
If you’ve decided that a property you’ve viewed is the one for you, the next step is to make an offer to the seller.
“Before you do, though, take some time to think about a few key things,” advises Rob Smith, Managing Director of Ellis & Co.
What the property is worth in your eyes
There’s an old saying that a property is only worth what someone is willing to pay for it.
So, think about what the property is worth to you, considering any work that may be required.
“Remember to always consider how much renovation the property will need, before you make your offer, as this can often add unexpected costs if you can’t move straight in,” says Rob.
How much you can afford to pay for it
Run run through your finances again before you submit your opening offer.
Take some time to assess how much you can afford to pay for the property should you need to increase your offer later.
“Even in a competitive market with lots of buyer activity, you should never pay more for a property than you’re comfortable with,” says Rob.
The seller’s situation versus your own
Find out more about the seller’s situation before you make your opening offer if you can.
Are they keen to secure a quick sale because they’re moving abroad or to another part of the country and have already found a property to move to?
Has the property been on the market for a long time, or attracted little interest?
“By finding out more about the seller’s situation and weighing it up against your own, you’ll be able to make an offer that suits you but will also give you the best chance of securing the property at a price acceptable to the vendor,” says Rob.
How the market is performing
Are you buying in a buyer’s market, where there’s less competition, or a seller’s market where prices are rising, and buyer activity is frantic?
“Assess the market conditions before offering,” says Rob, “and speak to a local agent to find out more about the number of properties in the area on the market against the number of active buyers.”
What similar properties in the area have been selling for
Finding out the selling prices of similar properties in the area can help you assess where to pitch your opening offer.
“Some of the best information available to you is finding out from a local agent what properties are selling for in the area you’re buying,” says Rob.
“Make use of the information available online, too.”
2. Speak to the seller’s estate agent
Once you’re happy with what you’re prepared to pay for the property, you should contact the seller’s estate agent, either by phone or by visiting the branch, and put your offer to them.
It’s the agent’s responsibility to take all offers to their client and then come back to you with their decision.
3. Put your offer in writing with your reasons why
As well as making your offer directly to the estate agent either by phone or in person, it’s a good idea to follow up with the offer in writing, too.
“It can be a good idea to also put your offer in writing, either by letter or email,” says Rob.
“It’s always good to have written evidence of everything, just in case there’s any confusion further down the line.
“You can also explain some of the reasons why you’ve reached the figure you’re offering, using examples of other properties in the area and how much they’ve sold for, or explaining some of the work you’d need to do to the property.”
4. Be prepared to negotiate
While some opening offers are accepted by sellers right away, others will either reject or come back with a counteroffer – so, be prepared to negotiate.
“If your offer is rejected, the seller’s estate agent will come back to you and may provide more information on why,” says Rob.
“Use this information, or request it, to help you decide whether to increase your offer, sit tight for a while, or walk away.”
Tips for making an offer on a house
Knowing where to pitch your offer on a property can be tricky, even for experienced homebuyers.
Here are some handy tips from our expert Rob that can help…
1. Do your research
Information is everything when buying a property – so soak up as much of it as you can.
“Your research should start the day you decide to move,” says Rob.
“From that point onwards, research the area, house prices, the national market, and your seller’s situation.
“Your local agent is the best source for this, as they’ll have an excellent grasp on the local market and what buyers are paying for properties in the area.”
2. Arrange your solicitor and mortgage in advance
Being well prepared can be put you in a great position when it comes to making an offer on a house.
“The majority of sellers and buyers are both looking for a quick sale or purchase, as well as a purchase price that works for them,” says Rob.
“If you’re well prepared and can move quickly, a seller is more likely to be attracted to your offer compared with another buyer who can’t proceed as quickly.
“So, arrange your solicitor early on and get a mortgage agreement in principle in place, so you can show the seller you’re serious.”
3. Sell yourself
The best way to convince a seller to accept your offer is by selling yourself as their ideal buyer.
“The offer stage is where you can tell the seller’s agent what makes you their perfect buyer,” says Rob.
“Perhaps you’re chain-free, or a first-time buyer, meaning you can move quickly?
“Or, you may be a cash buyer, meaning you don’t have to go through the mortgage application process, which can slow down transactions.
“Make sure you tell the agent why you’re the right buyer and they’ll pass all this information on to their client.”
4. Try to put emotion to one side
Of course, buying a home will always be an emotion process.
But when you’re negotiating with a seller over price, try to leave emotion out of your decision-making.
“Being overly-emotional can see you make poor decisions,” says Rob.
“That could mean you overpay for the property, or you walk away when perhaps there was still a chance of securing the property for the right price.
“Try to remain calm throughout the process and think things through thoroughly before making any big decisions.”
What is a reasonable offer on a house?
Some buyers will pitch their opening offer below the seller’s asking price, while others may offer what the seller wants right away.
“It’s best to offer between 5% and 10% lower than the market price, but always go lower than your maximum to allow room for negotiation,” says Rob.
“You can research house prices in the area with similar square footage and the number of rooms to make sure you are buying at a fair price.”
Do you need to have a mortgage before making an offer?
While you won’t be able to complete your mortgage application until after your offer has been accepted, you can get an agreement in principle (AIP) in place before you start your property search.
“An AIP shows what a mortgage lender may be willing to loan you to buy a property and can be used to show a seller that you’re a serious buyer who has a good chance of getting the finance they need,” says Rob.
“AIPs can be done online in just a few minutes, too.”
How long should you wait to put an offer on a house?
How long you should wait before making an offer on a property depends on two main factors:
- How much competition there is for the property you’re offering on
- How quickly you can reach a decision on the right amount of money to offer
“In a strong market with plenty of buyer activity, you may need to make an offer more quickly,” says Rob.
“But in all scenarios, it’s important you take enough time to think about how much you’re comfortable offering.
“On the other side of the coin, waiting too long before making an offer could mean the seller views you as someone who isn’t serious about buying, so it’s always a tough balancing act.
“If you’re initial offer is rejected, waiting at least 24 hours before making an improved offer can be a good approach and mean you don’t come across as too keen.”
Can I make an offer on a house sold STC?
It’s still possible to make an offer when a property is listed as ‘Sold STC’.
This means the seller has accepted an offer and the property is ‘sold’ subject to contracts being exchanged.
“Until contracts have been exchanged, the seller is free to consider any further offers from other buyers and their estate agent is legally obliged to pass these on,” says Rob.
“However, before making an offer on a property that is ‘Sold STC’, consider that you’d be ‘gazumping’ another buyer should the seller accept it.”
Your offer is accepted – now what?
If a seller accepts your offer, there are a few crucial steps you should take right away, according to our expert Rob.
1. Have the listing removed
Once your offer is accepted, speak to the seller’s agent, and ask them to remove the property from all online listings.
“You may wish to make your offer conditional and subject to all listings being removed,” says Rob, “as this can help limit the chance of you being ‘gazumped’ by another buyer.”
Finalise arrangements with your solicitor
As soon as you receive confirmation that your offer has been accepted, contact your solicitor, and let them have all the details of your purchase.
“Legal work and conveyancing can throw up the odd issue along the way, with searches for example,” says Rob.
“So, the earlier you can get the process moving with your conveyancer, the better.”
Complete your mortgage application
Contact your mortgage lender once your offer is accepted and provide them with all the information they need on your purchase.
“You should already have an agreement in principle (AIP) in place,” says Rob, “so contact your preferred lender as soon as you can so you can complete your mortgage application and move to the ‘mortgage offer’ stage as quickly as possible.”
Arrange your survey
Unless you’re buying a new build home, having a property survey carried out before you exchange contracts is highly recommended.
“A survey will be able to tell you that the property you’re buying is sound and there are no major problems with its structure,” says Rob.
“If there are issues, these will be flagged up in the survey report so you can decide if you still wish to proceed.”
Provide all documentation quickly
Throughout the process of buying a home, various people will require key documentation from you, including your mortgage lender and solicitor.
“To keep things moving and on track, make sure you provide any documentation as quickly as you can,” advises Rob.