There is lots of debate over making an offer as the protocol varies wildly between different areas, budgets and generations! The rule of thumb generally seems to be – more expensive properties outside of London move slower and provide an opportunity to negotiate/make offers. Lower cost housing in London is currently at a very high demand and there is little opportunity to dawdle or offer below the asking price (unless there is an underlying issue- approach with caution).
That being said – never offer more than you personally think a property is worth, but be realistic at how much property costs these days.
If you are unsure and want to consider the cost along with any potential works you plan to do; get advice from a local professional in residential renovation on a consultancy basis- they will know the typical costs for the area and can advise on renovation costs and any planning issues.
- Research to find if any regeneration projects are due for the area – sometimes properties are priced up if it is believed that the area will be regenerated, but beware of buying unless there are concrete plans in place. Also consider how long you plan to stay at the property – regeneration takes time and you may not make as much as you think if the area changes slowly.
- Write a letter to go with your offer – always mention beneficial reasons for the seller to go with you:
- Can move quickly/can wait until they are ready
- Not in a chain/or have a buyer ready for your property
- Large deposit
- Nice people/love the property and will live in it yourselves- adding a personal touch may encourage some sellers to go with you and will potentially dissuade them from gazumping you in the future.
- Ring the estate agent to check they received your offer and ensure they have all your details to contact you with a response.
Once your offer is accepted – ask the seller to remove the property from the market immediately. They are not obliged to, but it is best to be clear that you are serious about moving forward with the sale and avoid being gazumped at the last minute by someone else offering the seller more money/quicker sale! If the seller does not remove the property – be prepared to push for exchange ASAP and keep your options open until you have exchanged.
Things to consider:
10% deposit – you will usually be required to pay a 10% deposit upon exchange – if your deposit is less than that, discuss with your solicitor how to proceed. Often if money is tied up as part of a chain of sale – you can look to agree a smaller deposit with the seller.