Planning & protection
But it is also an exciting time and likely to be one of the most significant transactions you will make.
Before making an offer on a property, there are a few things you need to consider to get you prepared. When viewing properties, prepare a list of questions to ask the estate agent to get as much information as possible.
This can include: How long has the property been on the market? Why is the current owner selling, and how long have they lived there? How much are utility bills and Council Tax? Have there been any other offers? What’s the minimum asking price the seller would accept? And remember to go into a viewing with an open mind, as there are lots of ways to update an older home.
It’s not just the property itself that will determine the value, there are external factors to consider that can also affect the price. These can include school catchment areas, transport links, crime levels, flood zones and development applications in the area, which can all impact on the property’s value.
Once you’ve an idea of how much you’d like to offer, you can then start the process of making an offer. Set yourself an upper limit of what you can afford to pay and consider going in with a slightly lower offer – around 5% – so you have room to negotiate upwards with the seller.
However, if other people are also interested in the property, it might be worth offering the asking price or even slightly higher, but you need to make sure you’re still not paying over the odds for the property.
Submit your offer to the estate agent either over the phone or in person. You should also provide a written offer (email is usually fine – but check this) and ask that this is passed on to the seller.
Needless to say, the seller will be mostly interested in the price you are offering; however there may be other deciding factors that are important to them, depending on how quickly you are looking to progress the sale, or you having a mortgage Agreement in Principle, so they know upfront you can afford to buy the property.
It will also go in your favour if you are a cash buyer or chain free, a first-time buyer who doesn’t need to sell their own property to finance the deal. And it may help if you can be flexible on the moving date, as the seller themselves might still be looking for their new home.
By showing the seller you are organised and already have a conveyancer and surveyor set up, so if your offer is accepted you are ready to proceed, this will indicate to the seller you are serious about buying their property.
You should make it clear to the seller that your offer is subject to the property being taken off the market, so no more viewings. If your offer isn’t accepted, you could consider making a higher offer if you can afford it, but don’t overstretch yourself.
When entering into negotiation, there are a few things to keep in mind. Try to keep your budget private – revealing the maximum amount you are willing to pay might make the agent tell the seller to hold out for more money.
Don’t act desperate. If the seller knows you have fallen in love with the property, the agent might think you’ll be willing to pay more.
Don’t be overly influenced by things the seller might throw in with the deal. For example, white goods – unless nearly new, these are worth very little so you shouldn’t pay too much for these to be left in the house.
Always take your time to consider your options; the agent might try to rush you, but this is a big decision, so make sure you think it through before increasing your offer. If the negotiation process gets too heated, or if you just can’t seem to come to an agreement on price, don’t be afraid to walk away from the deal.
If your offer is accepted that’s really great news, but don’t be discouraged if it’s not – another home will be waiting for you just around the corner. There are plenty of other homes out there, and you don’t want to end up overpaying for one just because you got caught up in the moment.
After your offer has been accepted, you will need to agree on the contract. If the property you’re buying is in England and Wales, your offer is not legally binding until you and the seller have exchanged contracts.
In Scotland, once the seller is happy to accept your offer, you’ll receive a ‘qualified acceptance’ letter, informing you that the seller accepts the offer and lists any conditions to be agreed before the sale is finalised.
Solicitors will then send a series of letters – missives – between each other, negotiating the conditions. Once both parties are happy, a final ‘concluding missive’ will be written and, when signed, is a binding contract between you and the seller.
Once you find a property to buy, you need to make your offer and negotiate the price, which can be daunting. But by doing your research and getting prepared, you’ll stand a higher chance of having your offer accepted.
We’ll help make your move a good one. If you’re thinking of buying your dream home, we’re here to help find the mortgage that’s right for you.
To discuss your requirements, contact a Fairstone adviser today.
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YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.