You want to buy a new property but you’re wondering whether to offer the full asking price or haggle. There are some situations where it’s OK to make an offer, even in the seller’s market we’re currently experiencing.
If you’re currently house hunting, you may have noticed there’s more buyers than properties at the moment. This means competition among buyers is very strong. If you find your dream home and you’ve got your mortgage offer lined up, it’s advisable to make an offer quickly.
Asking price or a lower offer?
Should you offer the asking price straight away to ensure you stand a good chance of securing your next home? Or is it worth putting in a lower offer?
Offering below the asking price is a gamble and of course, a personal choice. The market is busy, and let’s be honest: some of us are naturally more confident with negotiating than others. We know there is a genuine lack of available properties for sale.
If you find what you think is your dream home and you really want to increase your chances of owning it one day, you may want to offer the asking price to ensure it becomes yours rather than haggling. However, if the property ticks most of your boxes but doesn’t blow you away, then you might want to risk making an offer.
Indeed, there are some situations where it may be worth offering less than the asking price, and you might stand a chance of getting an offer accepted. Here’s a few reasons to consider negotiating…
The property may be too expensive
If you have done your research on prices in the local area, and you feel that the property is overpriced compared to other similar-sized homes in the same area.
You’re a strong buyer without a complicated chain
If you have your mortgage Agreement in Principle certificate and you don’t have a property to sell a vendor would look favourably on your situation as the sale could take less time without a chain and you have written proof that you have a mortgage offer.
You’re organised and efficient
It’s also useful to let the vendor know you have a solicitor and surveyor lined up so that you can demonstrate you’re on top of the situation and ready to get things moving.
You’re a flexible buyer
Does the vendor want to move by a certain date, and can you accommodate that? Property purchases have been taking longer than usual due to the pandemic, so you’ll want to bear that in mind. On the other hand, if you are generally quite flexible on when you move then this could benefit the vendor.
The vendor wants to sell quickly
You know the vendor wants a quick sale and you’re in a position to move quickly. Again, a chain-free purchase is always attractive to a vendor.
The property price is slightly beyond your means
If you love the property but the asking price is just slightly beyond what you can afford, then it’s worth making an offer just to see how the vendor responds. Make sure you have a mortgage agreed for the amount you intend to offer.
The property has been on the market for some time
If you can see from Rightmove or the estate agent’s website that the property has been on the market for a while, you may want to make an offer. Ask the estate agent why they think the property has been on the market for so long and see if they can give you any clues as to why it hasn’t sold yet. This may benefit you when it comes to negotiating.
The property needs repairs
You’ve found a house you like but you know it’s a project home. You can tell you will have to spend time and money getting it fixed up to meet your needs fully. It’s not just the cost of repairs that should be factored into your offer, but the time and inconvenience of having them done. The seller should really take this into consideration.
What should you offer?
This largely depends on how brave you are feeling when you negotiate. Some buyers will offer ten per cent less than the asking price but again it depends on how keen you are to buy the property. If you make a brave offer and the vendor turns you down, you can continue to negotiate. Set yourself an upper limit of what you would be prepared and can afford to pay and have that figure in mind when negotiating with the agent.
How should you make an offer?
Call the estate agent and let them know the offer, and then put your offer in writing by email. Even if the agent doesn’t think your offer will be accepted, they do have a legal obligation to let the vendor know an offer has been received.
If your offer is accepted, let the agent know you expect the property to be taken off the market so that no more viewings are carried out.
Remember if you’re chain-free, you’re in a very strong position. If you’re not, but you already have a firm offer on your property then let the agent know.