For many homebuyers, the toughest part is to figure out how to put an offer on a house. The process often involves contemplation, negotiation and subsequent higher bids. It can be tough knowing where to start. The first thing you should do before you commit to any kind of offer is to get a Move iQ Property Report, which will bring all the key facts you need to help you with the biggest financial commitment of your life.
Here’s what else you need to know about how to put an offer on a house, from working out how much to offer to putting in an actual offer on a house.
How do I make a successful offer on a house?
So, how do you make a successful offer on a house? There are many things to consider and you’ll need to do your research:
- Look at how much similar properties are selling for, what’s the housing market saying?
- Speak to local estate agents
- Research the local area
- Set a budget for how much you can afford
- Consider how long the property has been on the market
- Depending on what the housing market is like in your area – bid lower than the asking price (a usual rule is to deduct between 5-10%)
- Are you in a strong buying position?
1. Do your market research
Make sure you play detective here – compare the home you want to buy with similar ones in the same area. Property portals are a good place to start, or the Land Registry. Or, if you want all this information and more pulled together for you, get a property report. It will contain everything you need to make a well informed and confident decision so you know how to put an offer on a house.
2. Use a local estate agent knowledge
Estate agents will have plenty of local knowledge, including recent sold prices in the area. While they’ll be working to secure a sale for the seller, you can still use them to your advantage before submitting an offer.
Some questions to ask estate agents when viewing a house include:
- How long has the seller lived here?
- How long has the property been on the market?
- Has the seller found somewhere to move to?
- How many others have viewed it?
- Have there been any rejected offers?
3. Research the area where you would like to buy a house
Remember – many things will impact a property’s value, and its location has a big role to play in this. For example, how good are the local schools? Good schools can increase the value of an area. Other things to consider include transport links, and whether there are any major works planned that will impact this. Again – a property report will contain this information.
4. Set a house buying budget
One of the most important things to do when working out how to put an offer on a house is to set a budget for what you can afford. You can do this by:
- Using a mortgage calculator
- Speaking to a lender and get a mortgage quote
- Don’t just consider the property price – but running costs & living expenses
Don’t exceed your maximum budget or bid too high – you need to work in the perimeters of what you can afford.
5. Consider the time the house has been on the market
In some cases, the seller will accept a lower offer. While there are no guarantees, if the property has been on the market for a long time, they might be more desperate to sell and therefore more flexible on price. This is why it’s essential to find out as much as you can from the estate agent.
6. Deduct 10% from the original asking price
A rule many follow if to deduct around 10% from the original asking price. This first offer might well be rejected, but it could give you more wiggle room.
7. Strengthen your house buying position
Some house buyers are more attractive to sellers (more than those with extra cash), including:
- First-time buyers or those who are chain free
- Cash buyers
- Organised and prepared buyers. Those with a mortgage agreement in principle or those who have a solicitor in place before making an offer on a property. This often demonstrates to the seller that you are willing to move quickly and are serious about proceeding.
This means you might be able to get away with bidding lower. Use any leverage you have to your advantage and make sure you state it in your offer. Always downplay the amount of money you’re willing to part with, to both the estate agent and the seller.
Also, don’t be too overt in claiming you’ve found your ‘dream home’, as the seller will automatically assume you’ll pay more for it. However, on the other hand, don’t pretend to be uninterested; all parties concerned are looking for a sure sale.
What to say when you put an offer in on a house?
Have you decided on your offer and are you ready to put an offer on a house? Firstly, inform the estate agent of your figure, regardless of how low; they MUST pass this information onto the seller. If the vendor is selling their home privately, inform them as soon as possible. One essential piece of advice is to put your offer in writing. This will ensure nothing gets lost in translation, reducing the risk of confusion later on down the line.
Be open and honest about what to say when you put an offer in on a house. Explain how you came to the offered amount, often this includes factoring in other similar houses sold in the area, and their sold prices. Even if you’ve decided to put in a lower offer on the house you would like to buy, it’s good to explain how you came to this house offer. Whether this is because you have concluded that the house needs doing up or whether your property report has revealed important information beforehand like the local infrastructure or flood risk.
What’s the correct way to make an offer?
As mentioned, presenting yourself as an attractive buyer can put you in a stronger position. So, your offer should also include information on:
- How organised you are
- Whether you’re chain-free
- Your mortgage agreement in principle
- The size of your deposit (the larger it is, the easier the mortgage process can be)
- Can you offer flexibility with your move-in date?
- How much you love the property
Assume a low first offer will be rejected
Assume your first offer will be rejected if it’s low. This rejection could also be subject to the property owner’s specific needs, such as an earlier moving date, for example. This is all about letting the seller know you’re interested, and you would like to negotiate the house price.
Is your offer legally binding?
In England and Wales, only once contracts have been exchanged does the sale become legally binding. Even if the offer has been accepted, either party can pull out until then.
When can you make an offer on a house?
It’s recommended that you attend multiple property viewings beforehand, don’t just view it once and submit your offer. You should also be ready to get things moving after your offer is accepted, e.g. getting a property survey done.
When should you increase your offer?
When making an offer on a property, prepare for the fact you may have to increase it.
But, only do this when it’s right, such as:
- When there is a lot of other interest
- If it’s your dream home
- You have have some flexibility in your budget and you can afford it
While it’s essential not to rush the decision, you’ll need to weigh up whether you’d rather put in a higher offer or lose the property. Did you plan for the possibility of an increase when you put in your initial offer? Or, was it the maximum you could afford?
Making an offer via sealed bidding
What if you’re making an offer on a house via a sealed bid? Here, you’ll have no idea what other potential buyers are offering.
Some tips include:
- Research the area and property thoroughly
- Always bid using an odd number
- Try not to panic
- Don’t overpay
Top tips for putting an offer on a house
Making an offer on a house can be one of the most difficult parts of buying. But, there are ways to make it easier and boost your chances of success:
Consider other interest
If your initial offer has been rejected, ask your estate agent why. Get as much information as you can. Don’t just increase your bid if you’re effectively bidding against yourself. Only ever offer more than the asking price if you know someone else has offered the asking price, or if you are really desperate to get this property.
Don’t submit a second offer immediately
If there isn’t anyone else expressing an interest in the property, don’t be afraid to take your time when responding with a second offer. Playing hard to get can work in your favour. If the seller is keen to sell quickly (albeit at a higher price), you have time on your side.
Having time on your side could work as an advantage. You can remain interested without actually changing your bid. It’s a way of negotiating without actually negotiating. At this stage, it’s about who sweats first.
Remember, there are more properties out there, so be ready to walk away if the seller isn’t open to negotiation. It’s never a good idea to spend more on a property than it’s worth.
Do your property research
Arm yourself with all the facts about a prospective property and the surrounding area to help you decide how to put an offer on a house and what to offer. A property report can tell you everything you need to know, such as how much similar properties have sold for in the area. Get your full property report below.
Last Updated: October 24th, 2022