When to accept an offer on your home
Accepting an offer on your house or flat is a tough decision. Not only should you take into account the current state of the market and what similar properties nearby have sold for, but also your own buying situation.
If you’ve only just put your home on the market, you may be tempted to wait for a more desirable offer. You may also want your agent to negotiate house prices with your buyer – however both of these can be a risky gambit. Good offers don’t come easy and you may find yourself eventually settling for far less down the line.
Whatever your situation, we’re here to help. Not all buyers are in the same position – and their offers are bound to differ, but with our guidance, you’ll be in a great position to know which offer to accept.
Low offer on your house – now what?
When presented with an offer that’s below – or sometimes well-below – your asking price, your immediate reaction can be anything from quiet disappointment to down-right incredulity. However, it’s important to take a breath and carefully consider what to do next.
Remember, it’s not all about price. Your buyer’s position will determine how seamless your sale will be and, more importantly, how quickly it will progress. This is especially important if you’re already buying a house, contingent on selling yours.
So, it’s important to keep an open mind. You may decide to accept a below-asking-price offer if:
It’s a first time buyer making an offer
When it’s a first time home buyer making an offer, you might want to think twice before rejecting their initial offer. First time buyers are deeply desirable since they have no chain – they’re in a great position to move quickly.
Buying your first home is, for many, a huge endeavour. In all likelihood, a first time buyer has been saving for years to realise the dream of owning their own home. Sentimentality aside, this means that they’re likely to be very serious and motivated to move the sale along swiftly, reducing the risk of any hold ups.
They’re property cash buyers
Depending on how you view it, a cash buyer could be the most desirable candidate for your home.
It essentially means that your buyer is able to pay for your property outright, without the need for a mortgage. This becomes especially important come survey and valuation time, since the sale of your home doesn’t wholly rest on these.
A buyer needing a mortgage will only be offered a loan to cover a percentage of the amount the surveyor values your home at. If this is lower than the offer you’ve already accepted, you may find yourself in the unenviable position of either having to accept a lower offer or losing your buyer completely.
A cash buyer is able to overlook the outcome of their survey and valuation if they like the property enough. This is especially advantageous if you’re selling a period property or one in need of extensive refurbishment, since both are more likely to produce an adverse survey. When this happens, a mortgage provider may withdraw funding completely, leaving your sale to fall through.
Negotiating house price – how to make a counter offer?
Any good agent will want to engage in some back-and-forth with your buyer. More often that not, buyers will be tempted to make a cheeky initial offer to provide an advantageous platform for negotiations.
Your buyer is fully expecting a counter offer so don’t be afraid to play ball. However, do bear in mind that by making a counter offer, you’re essentially rejecting your buyer’s previous offer. Decide ahead of time if you’re willing to take that risk. Your agent will have experience in this area so be sure to ask their advice.
Before you begin negotiations, make sure your estate agent has all of the buyer’s financial details – do they have a healthy deposit and mortgage agreement in principal? Is their offer contingent on selling their own home? This will help you with your decision making.
Next, have a figure in mind that’s below your asking price, which you’d be willing to accept, if your buyer’s in a good position. What happens after this is up to you and your agent. You could just lay your cards on the table and ask your agent to make the only counter offer that you’d be willing to accept. If you do this, make sure that your buyer knows that this is your best and final offer. However, be aware that your buyer has nowhere to go from here so you may lose them.
A safer bet would be to make a counter offer that’s closer to your asking price, then your agent can continue to negotiate until an offer is made that you’d be willing to accept. Whichever way you decide to go, don’t be afraid to ask your estate agent’s advice and be guided by them – after all, they do this for a living and they’ll always have your best interests at heart.