Making an Offer on a Property
Properties that we liked had become challenging to come by. However, after seeing one online that was towards the top of our budget, we decided to go and view it to see how it appeared in real life.
We've spoken previously about properties looking different online, and even though we really liked this one (and when I say really liked, I mean really liked), we were somewhat apprehensive that we'd be underwhelmed when seeing it in person.
However, it turned out that we loved the property as much as we thought we might. Although, there were a few minor issues; some of the plaster had cracked in places, the kitchen appeared slightly smaller than we'd anticipated, and the bathroom could also have done with an update. Yet even though it wasn't perfect, we decided to put an offer in. Here are a few things to consider before putting an offer in, and a few of our experiences.
Know your finances
Making an offer on a property is huge. We worked out our finances before looking for a place, but everything becomes more real when you're potentially offering hundreds of thousands of pounds for a property!
The amount of money involved is scary, but ensuring that you can afford it is vital, especially if you're shopping towards the top end of your budget. Ensure that you stick to your limit.
It's also important not to let on how much you're willing to spend. If the buyer or estate agent knows that there's room in your budget, it's likely that it will be exploited.
Questions to ask before making an offer
Our offer went through Yopa, so it wasn't done in the 'traditional sense' of making an offer. However, if you're to go down the tried and tested route of speaking to an estate agent, here are some questions that are worth asking.
Has there been much interest?
You may have a higher and lower figure in mind when looking to make an offer. If you know that there's been a lot of interest, then it's wise to assume that your lower offer will likely be rejected.
That isn't to say that you can't go in with the lower offer, but bear in mind that if there are higher offers on the table, then yours will likely be rejected, and you may not even get a chance to negotiate to your higher figure.
On the flip side, if there hasn't been much interest, then it's likely that the owner will be willing to negotiate the price. Here you are more likely to succeed with your lower offer or at least be able to negotiate with a little more power.
Have there been any offers?
The estate agent can't tell you how much has been offered on a property, but they can tell you how many offers there have been.
Similar to finding out how much interest there has been in the property, what the estate agent tells you will give you an idea of what offer you want to put in.
Making an offer on a property
Contact the estate agent
A more traditional way of putting an offer in on a property is to call an estate agent and say that you're willing to make an offer on a property that you've viewed. By law, the estate agent has to pass the offer on to the seller.
Put the offer in writing
It's also worth emailing the offer to the estate agent off the back of your phone call. This can help avoid any confusion further on in the process. For example, the estate agent may have misheard you on the call and passed on the incorrect offer to the seller. That may sound farfetched, but it does happen.
State your position
Along with your offer, it's worth re-emphasising your buying status. Selling to a first-time buyer may be preferential to the seller because they know that there's no chain on your side which decreases the risk of the property falling through. Being a cash buyer can also speed the process along.
Cover your property purchase
Should your offer be accepted, get your move insured. 1 in 4 properties fall through, which costs £2,403 on average. Your fees are protected by taking out our Home Buyers Protection Insurance should your property fall through. It's hard enough saving for your deposit. If the worst happened, you wouldn't want to be nearly £2,500 down searching for your next house.
Offers over meaning
As mentioned, we went through Yopa, which meant that we dealt directly with the vendor. Essentially, you book a viewing time and communicate with the vendor via the online messaging service, and the same happens when putting in an offer.
The house we were interested in was listed for offers over the asking price. Essentially, this means that the seller wants more than the listed price.
There are a few possible reasons for listing a property as 'Offers Over' or 'Offers in Excess of (OIEO)':
- Most obviously, they deem the property worth over the stated price and want to see how much buyers are willing to pay
- The seller may have a clear value in mind that they're willing to sell for
- The sellers' and the estate agent's valuation might differ, so they compromise on offers over a stated amount.
We submitted our offer to the seller, who responded within a few hours, thanking us for it and informing us that they have a handful of final viewings later in the week, but she would tell us whether or not we had been successful.
What to do if your offer is rejected?
In short, there's not a lot that you can do. Despite increasing our offer, the seller went with another buyer. We were properly gutted by this because we really saw ourselves in that property and could see it becoming our home.
We contacted Yopa a few days later to get more detail on why our offer wasn't accepted. The property market is a different place to the one I was in when I bought my first property, so we wanted to understand what we were up against.
They replied and stated that three offers went £10,000 over the asking price but one that went almost three times over that.
The £10,000 number didn't surprise us. That's where we were with our offer, but how do you compete with a buyer going to almost £30,000 over the asking price?! It was an eye-opening experience, but at least we knew what we were competing with.
Back to square one
The feeling of being back to square one in search for a home wasn't a good one, but it taught us not to get too attached to a property or get too far ahead of ourselves either.
After a few days of feeling sorry for ourselves, it was a case of getting back on the bike and looking again. There isn't much else that you can do in that situation other than dust yourself off and learn from what's gone on before.
We fired up the laptop and headed back to Rightmove...!