Are you ready to make an offer on a property but unsure how to approach this?
Whether you are a first-time buyer or a seasoned mover, it is important to know when the right time is to make your move. Before jumping in, there are a few important steps to take. If you require a mortgage, do you know how much you can borrow? Have you determined the maximum purchase price you can afford? Have you set aside sufficient funds to cover your deposit and all the associated costs? And how should you approach the seller or estate agent when making your first offer? With so much to consider, it is crucial to plan and prepare in advance. Here we aim to provide you with the essential basics for making an offer on a property.
Before You Make an Offer on a Property, Preparation is Key
Unless you’re fortunate enough to not need a mortgage, your first step should be to figure out how much you can comfortably afford to borrow. A reputable mortgage broker can simplify the entire process and serve as your main contact throughout your purchasing journey. Alternatively, you can check with your bank, but keep in mind they can only offer their own products and might not get you the best deal.
Following a meeting with a mortgage broker you should be clear on:
How much you can borrow and the ongoing monthly mortgage payments.
The amount of deposit you need to put down to secure the mortgage.
Total Costs involved when buying a home, from lender fees, surveys, solicitors fees and then broker fees, if relevant (check out our article on Broker Fees for full details)
Make sure you are armed with your mortgage Agreement in Principle (AIP), a key step before you head out on your search for a property,
And if you are reliant on selling a property then you should only consider making an offer once you have agreed a sale on your own – estate agents are unlikely to entertain you unless you can provide details of your buyer, thus making you ‘proceedable’.
Essential Tips to Make an Offer on a Property
For first-time buyers, making an offer on a property can be both thrilling and intimidating. Purchasing your first home is probably the largest financial commitment you'll ever make. Whether you're a first-time buyer or moving to a new home, there are several crucial considerations to ensure you secure the best possible deal:
Never start with your highest bid. Unless the property is new on the market and attracting significant interest, it’s wise to begin with a lower offer—though not so low that it frustrates the agent or seller. A modest initial offer provides room for negotiation and helps ensure you don’t overpay for the property.
Consider the seller's circumstances. Ask them questions around how long the property has been on the market, and why the seller is looking to move. If they are under pressure to sell quickly, you may be able to make a lower offer and still secure the property. If, on the other hand, the seller is in no rush to move or have a number of people interested in their property, you may need to be more competitive with your offer.
Make it clear to the estate agent that you have already secured your mortgage agreement in principle as this shows you are a serious buyer and, if necessary, you can move quickly to finalise the sale. As a first-time buyer you often have an advantage over more experienced home movers, as they are less likely to be able to move quickly.
Stand Your Ground! If an estate agent pressures you to consult their in-house mortgage advisor, hold firm. Remember, estate agents work for the vendor, not for you. While they might seem helpful and accommodating, their primary objective is to secure the best possible price for their client. If you’ve already found a reliable mortgage broker, there’s no need to switch to the estate agent's recommendation. Doing so could benefit the agent and the vendor more than you. If necessary, your broker can communicate directly with the estate agent to confirm your strong financial position. Don’t forget to share your mortgage Agreement in Principle with them!
Negotiate well and do not show all your cards too early in the process. While it can be tempting to reveal exactly how much you are willing to pay, hold off until you have a better idea of what the seller is looking for. This ensures you do not end up paying more than you need to whilst also giving you room to negotiate for a better deal.
In summary, making an offer on a property can be a nerve-wracking experience, particularly for first time buyers. However, by approaching the negotiation process with care and consideration, you can ensure you get the best possible deal on your first home. Remember to find out the seller's circumstances, start lower if they are keen to press ahead with a sale, mention your Mortgage AIP, show caution around using the estate agent's own broker, and hold off on revealing your complete hand until you have a better idea of the seller's expectations.
Good luck, and happy house hunting! And when you are ready, check out our article My Offer Has Been Accepted, What Happens Next?
Your home may be repossessed if you do not keep up repayments on your mortgage.
Published by Beechwood Mortgages Ref: 219335 with review and approval from Stonebridge Mortgage Solutions Limited who is authorised and regulated by the Financial Conduct Authority Ref: 454811.
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