Once you’ve found a place that ticks all your boxes, it’s time to put in an offer. Simply phone the estate agent, tell them you’re interested, and name a price you’re willing to pay (a good place to find actual property prices in a given area is upmystreet.com – an impartial online service that also gives info on local schools, crime, council tax, and more).
If the property’s a little over your mortgage budget or if you think it’s overpriced, don’t be afraid to make a lower offer – the seller can only say no. If the property’s been on the market a long time, the seller’s after a quick sale, or your offer isn’t too far below asking price, it’s quite possible your offer will be accepted.
Don’t know how to make an offer? Simply catch an episode of Location, Location, Location and watch pros Phil and Kirsty tackle estate agents – they do it at the end of every episode and invariably net the buyer a discount.
If the seller falls over laughing at your offer…
…this is not a good sign, but should it happen, all is not lost. If your heart is really set on that property you can up the offer (be careful not to exceed your comfortable borrowing limit). If you’re not prepared to pay more, then wave goodbye to the property and resume the hunt for your first home.
The Bidding War and Gazumping
If you’re putting in a low offer, one factor that won’t work well in your favour is if someone else wants the property. The vendor is then in the strong position of being able to refuse the lowest offer, and that bidder would then have to top the rival offer to stay in the game.
This could lead to a bidding war, where both sets of buyers continually outbid each other until one side drops out. The ‘winner’ could then potentially end up paying a lot more for the property than it’s worth – so be well aware of the pitfalls if getting into this situation!
But even if you win and a sale’s been agreed, this may not be the end of it. Another buyer can waltz in later and make a better offer, in a move called gazumping. The vendor is entitled to accept the gazumper’s offer, and the bidding war could start all over again. Sadly, gazumping is not illegal*, and the only thing you can do as a buyer is pray that it doesn’t happen to you.
Two Factors That’ll Work Well in Your Favour
1. Tell the estate agent you’re a first-time buyer. Not being in a chain means you can move straight away, and sellers love a buyer who can move quickly.
2.Obtain a ‘mortgage agreement in principle’. This isn’t a solid commitment from a mortgage lender but a provisional ‘OK’ – it lets the estate agent and seller know that you’re serious about buying and that you’re not a time waster.
If Your Offer is Accepted…
…you will soon receive written confirmation from the estate agent under the heading 'subject to survey and contract.' This heading is a reminder that you are not yet legally committed to buying the home and can still pull out should you wish. Likewise, the seller can still take their home off the market, or accept a better offer (you’ve been gazumped!). Matters only become legally binding from the point of exchange.
And Don’t Forget…
…to establish what the price for the property actually includes, e.g. carpets, washing machine, garden ornaments and fixtures and fittings. Some solicitors will do this for you by asking the vendor to complete a checklist of household items that are to remain.
*Gazumping doesn’t happen in Scotland, which has its own home buying procedure. The information outlined in this section of the guide is relevant only to buyers in England and Wales.
Next - Step 8: Choose a Solicitor / Conveyancer
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