For many home buyers, it can be tough to take no for an answer!
The process of buying often involves rejected offers and subsequent higher bids. It can feel like a minefield!
For some buyers, there’s plenty more fish in the sea. But, for others, they’ve latched onto their dream property and can’t bear to let it go.
So, what should those in the second category do if their offer is rejected?
Here’s a look at when, how and why to increase an offer on a house.
How to make an offer on a house
Understandably, many get confused by the buying process, especially when it comes to what to offer. So, let’s straighten things out.
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, as all parties concerned are looking for a sure sale. Find the balance!
But, what about when it comes to the price? Here’s how to make an offer on a house in the UK:
Working out how much to offer on a house
So, how do you know how much to offer in the first place?
- Always do your research into the local area, and how much similar properties for sale are going for
- Bid lower than the asking price (a usual rule is to deduct between 10-20%)
How to put an offer on a house
Once you’ve decided on your bid, it’s time for the next step!
Firstly, inform the estate agent of your offer, regardless of how low, as they will 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 also put your offer in writing! This will ensure nothing gets lost in translation, reducing the risk of confusion later on down the line.
Making an offer on a house in the UK can be the cause of arguments and conflict. To make sure this doesn’t happen, be as clear as possible with the seller or agent and keep communication open!
Assume a low first offer will be rejected
Go back to the drawing board. Assume your first offer will be rejected if it’s low.
This is all about letting the seller know you’re interested, and you would like to negotiate the house price.
Making an offer on a house - when to increase
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! Here’s some examples of when that might be:
If there’s a lot of other interest
Other interested buyers will put pressure on you.
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!
If it’s your dream home
When a property ticks all the boxes, it can be tempting to do everything in your power to secure that dream home.
But, sometimes this is for the best!
Many factors go into making a property 'perfect':
- Local area
- Proximity to transport links
If you’re certain this property is the one, why not increase your offer?
If you have more in the budget
It’s likely you knew your first offer was too low, and would be rejected.
While not all buyers are able to find more money in the budget, many plan for the possibility of increasing their offer.
So, did you consider this when you put in your initial offer? Or, was it the maximum you could afford?
When should you avoid increasing your offer?
When making an offer on a property, you may decide not to increase it at all. Every situation is individual, so there’s no hard and fast rule about whether you should raise your bid or not.
Just as it’s difficult to know what to offer on a house, it’s also hard to know when not to increase.
Here’s some situations where you should avoid it:
If there’s no other interest
Playing the waiting game could work in your favour, especially if no one else appears interested in buying the property. If your offer is left on the table and is the only one the seller gets, they may agree to it when no others arrive.
If this is your chosen negotiation tactic, it’s worth ensuring the estate agent is aware you’re still interested.
If it’s been on the market for a long time
How long has the property been on the market?
If it’s been up for sale for a long time, this is good leverage. While there are no promises, it might be worth holding out, as the vendor will be desperate for a sale.
If you have a good relationship with the seller
Proving you’re a committed, willing buyer, might decrease your chances of having to increase your house offer.
The seller wants a sale. So, they might be more likely to choose your lower bid than the higher one of an unreliable buyer.
If you’re in a strong negotiation position
You’re in a very strong position if you are chain free.
This means that you’re either a first-time buyer, or have an accepted offer on your house. If this is the case, the seller may take preference to your bid than someone who hasn’t started marketing their property yet.
Use your relationship with the estate agent to get more information on other interested parties. Do this as early as you can. An offer from someone who is able to proceed swiftly is usually more attractive than one from someone who is yet to sell their existing property.
Tips for increasing an offer on a house
Every sale is different and will always involve an element of risk. The best you can do is ensure you’re as prepared as possible. This way, you'll understand what you’re up against.
So, if you’ve decided to increase your offer, here are some tips to boost your chances of success:
Find a formula that works
There’s no template for the right way to buy a house, every negotiation is different – depending what cards are on the table and what’s on offer.
If your initial offer has been rejected, take a step back and try to make a rational assessment of the situation. This will help you work out what your options are.
Just because you’re desperate to buy something, it doesn’t necessarily mean you have to rush the process. The key is finding the right balance. At the end of the day, you want a house at a price you are happy with.
When you increase your offer, the same rules apply as your initial approach. Don’t just up your previous offer a bit, you should try to be a bit more scientific in deciding what to offer on your chosen house.
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.
If no one else is actively trying to buy the house, you simply need to make your second offer as attractive as possible.
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 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.
To play this card, explain to your agent that you want to take some time to think about it. Ensure they understand that every penny counts and this increase is a big deal for you.
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 research
Buying a home? Arm yourself with all the facts about a prospective property and the surrounding area to help you decide when 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 report here!