Tue 16 May 2017
Ferndown have provided some hints and tips for first-time buyers on how to make an offer on a property, and have it accepted.
Of course it is understandable, that whether you have been looking for 7 days, or 7 months, that it can all get very exciting and easy to get carried away. However, first things first, you have do decide to make an offer.
The question is, how do you go about it? After all, the offer has to acceptable for the vendor, but at the same time you don't want to over-pay.
First step; Know what is reasonable and fair:
The seller wants to get the best possible price for their house but you want to keep the price as low as possible. The way around this is to do your homework on the type of property and the area. Get accurate idea of what the property is really worth.
To do this you should do three important things:
1. Get a comparative market analysis (CMA). Ferndown Estates, or your agent, can carry out the CMA on your behalf. You can also genrate one with Ferndown instantly using our online valuation tool: http://www.ferndownestates.co.uk/#valuation giving you a maximum, minimum and estimate of the property you want to buy, as well as those recently sold in the area. Essentially, what you’re looking for is how the property you’re interested in compares to other similar properties. Factors include square footage, the number of bedrooms and bathrooms, sold prices vs. list prices and average sales prices. The end result is an accurate estimate of the property’s true value.
2. Instruct a professional surveyor. Estate agents, such as Ferndown Estates, offer quotes for valuation surveys. Professionals have a better eye for features and flaws and can weigh them against each, which, when combined with knowledge of the current and local property market, can be used to provide a very good idea of the home’s worth.
3. Conduct your own inspection. Do everything that the stereotypical prospective buyer would do, like open and close all the cupboards and doors, check the fuseboard and electrical points, look under the sinks and basins, and be generally nosy! Yes, you might feel like you’re invading privacy or even being rude, but if you’re going to hand over a large sum of money to buy the house, you need to know that the house of your dreams is just that, and that none if the pipes leak, wiring is ok and that the ceiling aren't caving in.
Now that you know what the house is worth you can put a price on it. Homes tend to sell for about 6% less than the asking price, so CMA will help you see if this is true for the houses in the particular area in which you intend to buy. Perhaps the houses in the area fetch prices that are only 4% less than the asking price or maybe it’s a buyer’s market and they sell for 8% less than the asking price. They might even sell at more than the asking price, if it’s a strong seller’s market.
If you find that your offer has to be on the upper limit of your budget, you can always request some reasonable terms, such as a request for some fixtures and fittings to remain in the property to be included in the sale price.
Should you start off with a low offer?
We recommend that if there has been alot of interest in the property, which is often the case in the current market, make your first offer your best offer. It shows sellers that you’re a serious buyer and is less likely to result in a 'bidding war' which can be frustrating and tedious. However, you should never offer more than the property's value, which you should have found from your research.
Other advisors may favour a more lowball approach. However this only really works in a buyer’s market, so be careful! If you go in too low, you might be dismissed, or your intentions as a serious buyer will be questioned.
Make a good impression.
If you can get the seller to like you, they are more likely to accept a borderline offer, or accept your offer if there were similar offers in a bidding war. So, make a good first impression. Compliment their home, offer to take your shoes off, strike conversation, maybe throw in a light hearted joke. Sellers can be very sentimental and want to know that their property will be looked after by good people, so you need to make a good impression.
Submit a written offer.
To make it all official, you need to submit a written offer. Get your proof of finances sent over as soon as you can along with your I.D. You will also need to provide information of who your financial advisor is (if applicable) and who you will be using as you solicitor. Your agent may be able to help arrange meetings with them if you are not sure.
Don’t be disheartened if you receive a counteroffer. Many first offers are rejected. Talk with your estate agent and discuss whether it’s reasonable and you can enter negotiations. Again, Ferndown can do this on your behalf.
Don’t be afraid to withdraw your offer if the seller isn’t willing to meet your most important terms or if negotiations become drawn out. You’re legally entitled to do so, but it might be a good idea to cover your bases with your estate agent or solicitor.
Making an offer is the single most crucial process of buying a house, so get all of your 'ducks in a row' before you proceed. Your estate agent is there to help you through the process, so don’t be afraid to take their advice. It's in their best interests that they sell the property quickly and you get a good service, so go ahead an ask questions!
Good luck and happy house hunting.
- See more at: http://www.ferndownestates.co.uk/articles
- You can also see all of our available properties at http://www.ferndownestates.co.uk/properties/sales
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