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Making an offer on a house: How to do it (and tips on how much to offer)

So, your property search is over and you have found your dream home.

It probably feels like a weight off your shoulders, particularly if you have been looking to buy a property for some time.

But the truth is, the real work starts now.

And by 'now', we mean making an offer.

Even in a steady market that appears to be working in the favour of neither the buyer or seller, knowing where to pitch your offer could be key to securing the home of your dreams.

Here's our guide to making an offer - and knowing where to start...

How to make an offer on a house in the UK

This is the simple part. If you like a property, you can make an offer simply by telling the estate agent, or the vendor themselves.

It's a good idea to also follow-up your verbal offer with the same one in writing, usually by email. While unlikely, this removes any potential for confusion further down the line.

That's it! If your offer is acceptable, the agent or vendor will inform you and you are well on the way to buying your new home!

If your offer is not acceptable, negotiations can start. And this is where CJ Hole's top tips can help...

Making an offer on a property

Before making your offer, much of the work and negotiation preparation should begin when you start your search and when you first meet the vendor or estate agent showing you around.

If you know the area you want to buy, do your research on what other homes in the street have been selling for.

Being aware of the market conditions can help you make the right offer, but pitching it in the right place will depend largely on your tactics once you are viewing a property.

You are scoping out the property to see if it's suitable for your needs and within your budget. Well, the estate agent or vendor will be doing the same with you.

They'll be looking for signs that you could be willing or able to pay the asking price, or very near it.

An agent will almost certainly ask questions about your budget, so try to downplay (without lying) the amount you are looking to spend.

Home buying is a 'heart and head' process. But showing too much of your heart and declaring your love for a property when being shown around will alert the agent that you are probably willing to pay more to secure it.

That will be passed on to the vendor who will almost certainly then hold out for a bigger offer with your desire for their home firmly in mind.

Making a low offer

Negotiations to buy a home can feel like high-level, inter-government talks for many. It's that daunting!

But as long as you know your budget and are fully aware of the seller's situation, you should be well-placed to come out with a purchase price that suits your needs and budget.

Make sure you know how long the house has been on the market and whether the vendor has already dropped the price.

And try to establish the vendor's personal circumstances. Are they caught up in a chain and need to sell quickly? Or are they due to start a new job in a new town uncomfortably soon?

Obtaining this information will be easier if you can establish a good relationship with the estate agent.

Ask them how many viewings they have completed on the property. If you are one of just a handful over a long period of time, you could be in a good position to make a lower offer, citing yourself as the vendor's last hope for a quick sale.

If you have a large deposit and are a chain-free buyer, make sure you tell the agent and vendor.

Sell yourself!

Being in a good position to move quickly and with minimum hassle is hugely appealing and could help secure you some money off the asking price.

Finally, if the property is on the market with more than one agent, the one who showed you around is far more likely to try to persuade the vendor to accept a lower offer so they can secure the commission ahead of their rival.

Tactics for making an offer on a house

It's important to remember here that every property transaction is different. Every vendor's situation and needs are different and so are every buyer's.

But generally, you should be aiming to start negotiations with an offer of between 5% and 10% below the asking price.

Remember, many sellers put their properties on the market for a slightly inflated figure as they expect to be negotiated down.

In a seller's market you may have the unfortunate and stressful experience of being out-bid by another buyer even after your offer has been accepted. This is called gazumping.

If so, remain calm and consider your options. Gazumping is not a nice experience and can bring out the worst in a buyer who considers their accepted offer as set in stone.

Only consider making a larger offer, potentially above the asking price, if you genuinely consider the property to be a once-in-a-lifetime dream home.

Remember, there are plenty more fish in the sea. Going above your budget could put you in financial trouble further down the line and regrets in property buying are often extremely costly.

Alternatively, in a buyer's market where you have an element of control, don't let this go to waste.

Letting your heart rule your head could see you paying over the odds to eliminate the buyer 'fear' of losing the perfect home.

Play hard to get and stay firm if you know you are holding the aces over a seller. But, as we mentioned above, stay polite and calm at all times even in the face of huge frustration.

Holding deposits when buying a home

Although rare, at times in an uncertain property market a seller may request a holding deposit from you as a buyer.

Yes, you thought your days of holding deposits were over when you stopped renting!

While this is a rare request and one often discouraged by estate agents, if a vendor has experienced time-wasters before your offer they may insist that you show you are serious about the property and completing the sale.

Try to judge a request such as this with an open mind. Insist that any holding deposit is refundable should the vendor pull out of the deal.

More importantly, make sure any deposit like this is held with the seller's solicitor.

If you are certain the property is for you and have insisted on the above, lodging a holding deposit shouldn't be a problem.

After your offer has been accepted

While having an offer accepted will be a huge relief for you as a buyer, it's important to remember the process is far from complete.

The sale is not legally set in stone until contracts are exchanged. That means your seller could still pull out of the deal or accept a higher offer from another buyer if the property is still being marketed.

When you make an offer, insist the property is removed from the market. This is will help ensure you are not gazumped.

However, in some cases, a buyer who viewed the property before you may come back to the table.

Gazumping at this stage will leave you with a decision to make. You may have already spent considerable sums of money on surveys and searches through your solicitor.

And the only way to safeguard that money may be to counter-gazump. But consider what you have spent already - if it pales into insignificance against the sum you are now offering for the house, it might be better to walk away frustrated but all the more knowledgeable for the harsh experience.

If you have any questions about buying a proprty, get in touch with your local CJ Hole office who will be happy to help.

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