Well done. You’ve searched, viewed, compared, contrasted, reasoned, rationalised and finally chosen. Now it’s time to put your money on the table (figuratively speaking, at least) and make the seller an offer they hopefully can’t refuse.

Mortgage in place?

If you followed the second of our guides [link to working out how much you can borrow guide], you’ll know what you are approved to borrow from a mortgage lender and will have a mortgage in principle in place. This will give you your first advantage when making your offer as you can show that you really mean business and are serious about proceeding.

Know your limits

if not, now’s the time to choose a lender and get your mortgage offer. This will let you know what you can afford and how much you can sensibly offer to secure your chosen property.

Putting in your initial offer

You’ll need to put your first offer in via the seller’s estate agent who is legally bound to pass on every one they receive. You could start with an unrealistically low offer and see how the seller responds, though this can often get you off on the wrong foot and make the rest of the process more difficult than it should be.

If you do start low, the seller’s estate agent will let you know how your offer was received and if anyone else’s offer beats yours. This is where you can think about upping your bid.

If you think the asking price is within reason (we’ll tell you how to make a decision on this later) and you are serious about securing the property, try offering 5% to 10% less than the asking price. Most sellers (normally on the advice of their estate agent) put their house on the market for more than actually want so is generally built in to asking price.

Of course you could simply have fallen in love with the property and not be able to imagine life without it. In this case, you could consider offering more than the asking price to secure it but find out if anyone has met the asking price first!

Don’t forget to always put the offer in writing (a telephone call followed up by an email will be fine) to avoid problems later.

The fun begins…

So you’ve heard back from the seller’s estate agent to say they are interested in your offer. Don’t forget this figure is still subject to things like surveys and contracts so is simply a starting point. This is the time to put on your poker face and start to negotiate.

Honing your bid

Fortune favours the brave when it comes to brokering the bottom line. Here are few important things to consider that could save you big money on the deal:

Are you paying cash? If you are lucky enough to be able to afford to buy without a mortgage, this will speed things up considerably and increase your bargaining power.

Is your mortgage ready to go? If you can act fast and complete quickly, you’ll stand out from the crowd.

Are you chain-free? If you’re not caught in a chain i.e., you are not relying on the sale of home to purchase the one you’re interested in buying, you’ll also be free to move fast which always looks good to sellers. 

Quick sale? Many estate agents are keen on a quick sale so can become best friend if they know you are serious about the purchase. After all, they want to earn their commission on the sale so are keen to sell the properties on their books – even if that’s at a reduced price.

How long has it been on the market? If the property has been for sale for a while, this may indicate that other buyers have found problems or think the price is too high.

Has the asking price dropped?
This could mean the seller wants a quick sale if they are in a chain or need to move fast.

Are you the only interested party? The seller may be happier to negotiate if no one else has put an offer in.

Are you flexible about completion? Suggest a date that suits the seller to make the process simpler.

What’s included?

Always ask to see a list of fixtures and fittings that will be included. Having this in black and white will mean everyone knows where they stand later on.

Local prices

Another thing you should check out is what similar properties in the immediate area have sold for. Sites like Primelocation and Rightmove make this easy and having a knowledge of the local market can give you a firmer footing for negotiation.

Sealed bids

More and more property sales are carried out using sealed bids, particularly in London or areas where demand is higher than supply. This means you write down your offer, seal it in an envelope (as the name suggests) and pass to the estate agent. On the stated date, the seller will then open the bids and normally choose the highest bidder as the preferred buyer. Again, if you are taking part in a sealed bid sale, don’t offer more than you can afford and ask how many other people are bidding, This will help you make a more informed decision about the amount to offer.

Holding deposits

You may be asked to provide a holding deposit to demonstrate that you are serious about putting in an offer. Again, this is more common in a seller’s market such as London. A holding deposit is normally non-refundable if you withdraw your offer.

Next step: Offer Accepted

Previous step: Getting the Most out of Viewings