How to make an offer on a house

After what seems like an eternity of searching, you’ve finally picked the house you want. Now you need to buy it.

Here's our step by step guide on how to make an offer on a house. To make sure you get a deal you're happy with.

4 steps on how to make an offer on a house

If you want to break it down into basic steps, here’s what you need to do:

• Research local properties
• Set a budget on how much you can afford
• Talk to the estate agent
• Negotiate

1. Research local properties

Preparation is key, and before making an offer do your research to find out how much similar properties in the area have recently sold for.

That way, you'll know if the price they're asking for is fair or not. It should also reassure you that you're not going to pay too much for the house based on the current market. 

Zoopla can be used to check for the house price of a specific property, or prices of similar properties around the area. You can also read more tips in our guide on how to value a house.

You should pay close attention to how quickly houses in the area are selling. If the houses are usually on the market for a long time, that could put you in a stronger position when it comes to negotiating. That's because the sellers might want to secure an offer quickly. 

2. Set a budget on how much you can afford

It's important to set a budget on the maximum you'll be able to afford and to stick with it.

Before viewing houses, some estate agents ask for a mortgage in principle (MIP) so they know you're serious about buying. A MIP provides an indication of what you can borrow, and what you can afford to spend on a property. It's not a guaranteed mortgage offer, but it gives you a good idea of your budget.

Remember it's not just the mortgage repayments and deposit you'll need to afford. There are other expenses with house buying to consider, such as:

• Stamp duty (The rate you pay depends on where you live in the UK)
• Legal fees
• Arrangement and booking fees
• Valuation fees
• Survey fees

3. Talk to the estate agent

Once you've done your research on the property area and you know how much you can afford, you're all set to contact the estate agent.

You can either call the estate agent, or go into their office. But make sure to put your offer in writing to ensure that the conversation is on-record should you need to refer to it.

By law, estate agents have to pass every offer you make onto the seller.

Deciding how much to offer can be tricky and you'll need to decide how much you're willing to pay for the property. Just keep in mind the budget outlined in your mortgage in principle so you don’t overspend.

4. Negotiate

If you're unsure how much to offer on a house, it can be tempting to go straight in with the asking price. But there are some circumstances where you're more likely to have a lower offer accepted such as:

• The seller wants a quick sale
• You're chain free, meaning nobody else is waiting for you to sell your own property
• The property has been on the market for a long time
• It's a buyer's market and properties are slow to sell
• You're a cash buyer, so you won't need a mortgage

If one of these situations applies to you and you want to try offering below the asking price, start with a reasonable lower offer. The amount depends on how much you want to spend on the property, but usually around 5-10% below the asking price. 

When offering a lower price, it also gives you room to increase the offer should the seller reject. Depending on the situation, you might need to come back with another offer 2 or 3 times until a final one is accepted. Of course, by doing this you may also miss out on the property if someone else offers a higher price before you do.

What does 'offers in the region' (OIRO) mean?

If the house is advertised as 'offers in region of' (OIRO), it usually means the seller is open to negotiation and may be willing to accept a lower offer.

What does 'offers in excess of' (OIEO) mean?

If it says 'offers in excess of' (OIEO), this means the buyer wants you to offer a price higher than the advertised asking price.

How to make sure your offer on a house is accepted

Negotiating an offer on a house can be daunting, particularly if you've never had to do it before.

Here are some tips on different ways you can improve your chances of getting an offer on a house accepted:

• Use any flaws you spotted to negotiate - if repairs are costly, ask for the price to be reduced.
• If there are other bidders, avoid round numbers so your offer stands out.
• Don’t go too low, as it may put the seller off future offers.
• Highlight a strong position, like being a cash buyer or chain-free.
• Act quickly after viewing to show you’re serious and beat potential competition.

What do I do after an offer on a house is accepted?

If they accept your offer, the estate agent will send you a written contract with the heading “subject to survey and contract”.

Nothing is set in stone yet – either party can still pull out of the deal if they wish.

Now is also the time to formally apply for your mortgage. You should already have a mortgage in principle which should speed things up.

If you've compared mortgages with our broker partner Mojo, their mortgage brokers can help you with completing the mortgage application.