How to Make an Offer to Buy a House
Buying a house can be an exciting time, but with so much to consider, we’re sure you’ll be glad you found this page.
Our team here at The Mortgage Pod has over 35 years of combined experience helping people buy property and secure mortgages, and we aim to guide you every step of your home buying journey.
If you’re ready to make an offer on a property, Get Started here, or stick around as this article will walk you through everything you need to know.
What Should I Prepare Before Offering on a House?
With all the excitement and big ideas for home buying, it’s easy to let emotions get the better of you and overlook the preparation stage, which we believe is essential to improving your chances of success when making an offer on a property.
Getting your ducks in a row and being prepared will provide you with more clarity and help avoid disappointment. So, let’s start with the basics.
Here are our suggestions before making an offer:
- Know your deposit: If there’s a gift, quantify it. How much do you have saved? You’ll want a clear understanding of your financial circumstances.
- Understand your budget: Know how much lenders may offer you and what the repayments will cost. Ensure this is comfortable and affordable.
- Consider all fees and costs: It’s important to know your available cash, but also how much all fees will cost—legal fees, mortgage costs, surveys, stamp duty, etc. Understand how much of your savings will go toward these expenses.
- Get an Agreement in Principle (AIP): Decide which mortgage broker you’ll work with. At The Mortgage Pod, we represent your interests throughout the entire home-buying process. Get an AIP with us today.
- Solicitor: Have a good idea of which solicitor or conveyancer you’ll use. This can help avoid being pushed towards decisions that may not be in your best interests.
- Research: Do your research on the property you are interested in and try not to offer too much initially, you can always increase your offer later.
Understanding the local property market and sold prices of similar properties can help you determine a reasonable offer.
Being a serious buyer with a mortgage agreement in place can make you more attractive to sellers, especially in a competitive market.
How Much Should I Offer on a House?
Many suggest offering 10% under the asking price, but it really depends on the situation.
If your dream home only just hit the market, offering closer to the asking price may be the best approach, provided it’s affordable and comfortable for you. This can earn goodwill with the seller, save everyone time, and help avoid disappointment.
However, if the property has been on the market a few months, you may want to prepare a more structured offer strategy. Feel free to contact us for help crafting a bespoke offering plan, tailored to you and a specific property of interest.
Top Tips When Making an Offer
- Do your homework: Check recorded comparable property sales in the area to ensure your offer is realistic.
- Understand the Vendor’s Position: Ask the selling agent about the seller’s circumstances, such as their reasons and preferred timescales for moving.
- Highlight Your Strengths as a Buyer: Mention that your deposit is ready, your Agreement in Principle (AIP) is secured, you have no chain, and you’re flexible on moving dates, or that you’re a first-time buyer living at home, this is all valuable information for the seller.
- Check Property History: How long has it been on the market? Have any sales fallen through? Rightmove and Zoopla are great resources. We use Rightmove Plus to gain additional insights, so feel free to ask us to check for you!
- Treat the Agent as a Gatekeeper: Be nice! The estate agent is the primary contact for the seller; they represent and advise the seller. You want them on your team! However, be firm and remember they do not act in the interests of the buyer.
- Understand Your Budget: You’ll want to know what a specific offer means to you, in terms of deposit required or monthly mortgage payment.
Get Started with The Mortgage Pod today for our more comprehensive tips!
What Do OIRO, Guide Price, and Offers Over Mean?
OIRO (Offers in the Region Of):
The seller is open to offers close to the listed price.
Guide Price:
A suggested starting point, or range, but not necessarily the final price.
Offers Over:
The seller is expecting offers above the listed price.
Our experience has taught us that the above terms can often be just marketing jargon and may be distracting.
Simply offering what you can afford for a property and what it’s worth to you can often be the best approach.
Do I Need to Use the Estate Agent’s Mortgage Broker to Make an Offer?
No. Even if a property-selling agent implies otherwise, you’re under no obligation to speak to or use the services of the estate agent’s mortgage broker. Although conditional selling is illegal, unfortunately, there are many reported examples online of estate agents who have engaged in this practice.
Can the Estate Agent Refuse to Pass My Offer to the Seller?
By law, all estate agents must communicate offers in writing to both the seller and the buyer making the offer. Unless contracts have been exchanged, the estate agent must pass on all offers.
Who Does the Estate Agent Work For?
To keep this simple, always remember that the estate agent works for and acts in the interests of the seller, not the buyer.
At The Mortgage Pod, we work for and represent the interests of the buyer, so please contact us for expert support and guidance tailored to your circumstances.
Should I Offer on a House Before Selling My House?
One of the most common mistakes we see enthusiastic home movers make is offering on a new property before they are proceedable and ready to move forward.
To put yourself in the strongest possible position when making an offer, you’ll want to be prepared, ideally with a sale agreed on your property, preferably to someone with no or a complete chain, such as a first-time buyer or another home mover who has already sold their property.
Selling yours first helps avoid any unwanted sales pressure or being pushed in a direction that may not be in your best interests. Contact us for a trusted local estate agent recommendation.
Can Anything Go Wrong After My Offer is Accepted?
A seller accepting an offer from a buyer does not guarantee that the purchase will be plain sailing through to completion.
Some common reasons for sales not completing include:
- Gazumping: This is when the seller accepts a higher offer from another buyer after they’ve accepted your offer. Unfortunately, there is nothing legally to prevent this from happening.
- Down Valuation: The property could be down-valued during the mortgage survey stage. The purchase price can be renegotiated if this occurs. Other survey-based issues could also arise.
- Legal Issues: It’s not unheard of for issues to arise further along in the buying process. For example, there could be issues related to a lease or other legal matters. It’s very difficult to prevent or plan for this scenario.
- Change of Mind: Once a property sale is agreed upon, this remains a verbal agreement only until contracts are exchanged. We recommend maintaining good communication with all parties involved to avoid loss of confidence and the potential for the seller to change their mind about the sale.
Can I Reduce My Offer After It’s Accepted?
A property sale and purchase remains a verbal agreement only until contracts are exchanged*. A buyer may wish to reevaluate their offer if certain issues arise, even after it has been accepted.
In our experience, the most common issues include:
- Down Valuation: If you’ve offered £400,000 for a house but a qualified surveyor believes the property is valued at only £350,000, this may influence your opinion of your original offer.
- Survey Issues: After the property valuation or survey, if the property is found to have issues such as structural problems, damp, or other essential repairs required, this will necessitate further discussion.
- Delays in Progression: A typical home buying journey takes 12 to 15 weeks to complete. It’s not unheard of for this process to take much longer, which may trigger a buyer to reconsider their offer.
- Gazundering: This is when a buyer reduces their offer, normally at the last minute, to pressure the seller into accepting a lower price for the property.
*With the exception of properties in Scotland, which will follow a different process.
When Does My Offer Become Legally Binding?
In England and Wales, an offer becomes legally binding only upon the exchange of contracts (this process differs in Scotland). It typically takes 12 to 15 weeks after an offer has been agreed upon to reach this stage.
When Should I Pay My Solicitor?
Solicitors will require around £300 upfront to cover the cost of third-party disbursements, such as property searches. Based on our experience, it’s best to pay this once you’ve received your mortgage offer.
As searches are specific to a particular address, if the property purchase doesn’t proceed for any reason, such as legal issues or down valuation, this fee may be lost.
Paying too early can be risky, especially in a competitive market where multiple buyers are making offers. Waiting until your mortgage application is approved and the offer is accepted helps protect your finances and ensures you’re only paying for legal work when it’s necessary.
Can The Mortgage Pod Help Me to Offer on a Property?
Absolutely, we can. At The Mortgage Pod, we aim to guide you through the entire home buying journey.
Not only do we take care of your mortgage application, but we also remain with you through to completion to ensure everything goes to plan.
We can help you understand the local market, work out your maximum budget, and communicate with estate agents on your behalf. Whether you’re a first time buyer or a home mover, our experience will help you enter negotiations in a strong position and secure the right property at the best price.
Frequently Asked Questions
Do I need to use the estate agent’s mortgage broker to make an offer?
You are never obligated to use the mortgage services offered by an estate agent, even if they suggest otherwise. Conditional selling is illegal. You’re free to work with any mortgage broker such as The Mortgage Pod, who will act in your best interests and help you navigate the offer process confidently.
Do I need to have an Agreement in Principle (AIP) to offer on a property?
Technically no, but it is highly recommended. Having an AIP confirms your financial situation and borrowing potential, making you a more attractive buyer. It shows estate agents and sellers that you are serious and ready to proceed. Get an AIP with The Mortgage Pod today and be ready to make an offer on a house.
How long does it take to buy a property?
In our experience, when buying a property with a mortgage, it typically takes 12 to 15 weeks to complete from the time your offer is accepted to the exchange of contracts. However, with expert guidance and proactive estate agents and solicitors, this process can sometimes be quicker, especially if you’re chain free or a cash buyer.
What should I do if I want to offer on a property?
Get expert advice! Before entering the negotiation process or deciding on an initial offer, it’s important to understand your financial position and the current local property market. We can help you prepare, communicate with the seller’s estate agent, and put you in the best position to have your offer accepted. Get Started with The Mortgage Pod today.
