Purchasing a home can be a stressful and complex undertaking, so let’s look at some useful tips on how to place a bid and be a winner.
Prior to making an offer
During your initial meeting with your chosen estate agent, be clear and firm about the amount you are prepared to spend and make a little less than what you can actually afford. Estate agents will often present homes at the top end of your budget, so this will put you into a good position from the beginning when it comes to negotiations.
Many people are excited and sentimental when it comes to finding a home that they really love. Do not be too obvious that you’ve had your head turned over a particular property or the seller will know that you would be willing to pay more for it. Try to be calm and ask a lot of questions.
Keep a close eye on what is happening in the property market in the area you want to buy. How many are selling and how quickly are they selling? If they sell slowly and for below the asking price, then you know you are in a strong position to put in a lower bid.
Putting in an offer
Tell your estate agent, as by law they have to pass on any offer they receive to the seller. It’s good practice to place a bid in writing as well, following an email or phone call will suffice. If the seller is interested, then the negotiation process can be initiated through estate agents. As an agent works for the seller, you may feel there is no one else to act on your behalf. Often buyers will hire a buyer’s agent to assist in the negotiation process. Finding reliable Conveyancing Solicitors London is also a must. Try a Conveyancing Solicitors London firm like Sam Conveyancing for your needs.
A lower bid is more likely to be accepted if:
The property has been on the market for some considerable time
If the seller needs to move fast
You are the only person to show interest in the property
Completion dates suggested by you work well for sellers
If you are able to move quickly and have the funds available immediately
Tactics for bidding
The bidding process can vary – open or closed. Open negotiations are much more common.
With open negotiations, such as the bidding process, start low. Maybe thinking about offers 10% lower than the asking price. It is often expected by the seller, so they put their property on the market higher than they expect to receive.
You will usually be notified if another bid tops yours, so you can bid again if it’s within your budget limit. Remember to stay cool and polite, interested but not desperate.
Sealed bids involve writing down your offer and sealing it in an envelope on which the seller chooses the highest. It is more common in very high demand areas such as London. It is important to stick to what you can afford and do not overbid, or you could find your mortgage company will not cover it.
Once the bid has been accepted
Gazumping is a problem that about 1 in 10 have experienced. Even when a bid has been accepted, it is still not legally binding until contracts have been exchanged. Sellers have been known to pull out if they receive a higher bid, leaving many buyers out of pocket. There is little to do besides ‘counter-gazump’.