Everything about making an offer

SunnyCat

My husband and I are FTBs and looking to buy in London commuter belt. We have viewed some houses over the last week or so and are thinking of making an offer on one (or two!) of them. We have lots of questions on how this works!

First of all, do we need to have a solicitor to be able to make an offer? Is the offer a legal document that needs to be prepared by a solicitor or is it something we can safely do ourselves?

We have two houses we really liked (probably have a small preference of one over the other). We are thinking on making an offer on our favourite, but should we consider making an offer on both?

It's not easy to work out how much to offer, though I realise we have to make that decision ourselves. Coincidentally, both houses have been on for 365k originally and reduced recently (one after 4 weeks and the other after 10 weeks) to 350k. I know we should do the research and see what similar nearby properties go for, but so much varies between houses and prices from even a year ago aren't exactly reflective of today's market. We are a bit worried about offering too little but at the same time don't want to overpay! We think we might offer 330, and end up paying around 340 (So we want to offer a little low to have room to negotiate). Is that a good tactic? One of the owners has rejected two offers, but according to the EA they were quite low. Does that mean the seller is unlikely to counter offer and we should go in with a higher offer instead? Is it an acceptable thing to ask the EA - whether the seller is likely to counter offer or if they will rather wait until an acceptable offer is made? Should we say we are prepared for a counter?

Addtionally, one of the prices is "in excess of". I understand it doesn't necessarily mean much, but is that a sign that we shouldn't go much lower? Or should we treat it as a regular price, especially that it was recently reduced?

Also, is it a good idea to explain that we are looking at two properties?

elaine77_04

I used to be an estate agent around 8 years ago and, unless things have changed dramatically in the private residential real estate world, I would consider the following points:

- Estate Agents are supposed to work for the Vendor and not for the buyer and so, if they are doing their job right, they should ensure they meet the needs of the Vendor first and not you so bear this in mind when listening to their recommendations and what they are telling you as they should usually have an ulterior motive!

- don’t put an offer in on two properties; choose which one you want more and focus on that one first. It’s not good practice (and not really fair) to put offers in on more than one property when you only want to buy one of them.

- decide on your BATNA (your walk away point) before you even make your first offer; it’s important that you know what your red line is regarding how much you are willing to pay for a particular property before you put your first offer in or you’re just wasting time and might as well just go in with the asking price.

- definitely tell the EA to mention to the Vendors that you have two properties you are considering offering on (but “this one” is your first choice).

- in England you don’t need to have a solicitor involved to make an offer - it is made directly through the EA and can be revoked right up until exchange of contract. You don’t need a solicitor (conveyancer) involved until the offer is accepted; the EA will then need your solicitor details in order to issue them with the Memorandum of Sale (some EAs will ask for this information earlier to keep on file).

- “in excess of” is usually an EA marketing recommendation when a house hasn’t had as much interest as anticipated (or a quicker sale is wanted) but the Vendor doesn’t want to reduce their price and therefore usually isn’t open to lower offers.

Finally, definitely make sure you check the sold prices of similar houses in the same area as it’s an unarguable fact if you tell them that a house right next door only sold for X; however, be aware they can (and will) mention every single additional thing that their house may have that the other doesn’t (if this is the case!).

Good luck! :T:)

eddddy

SunnyCat wrote: »

Is it an acceptable thing to ask the EA - whether the seller is likely to counter offer or if they will rather wait until an acceptable offer is made? Should we say we are prepared for a counter?

If you say that you're prepared for a counter offer - you're essentially saying that you're prepared to increase your offer.

Therefore your current offer is almost certain to be rejected.

Instead, you should indicate that your first offer is the maximum that you're prepared to pay - and you will walk away, if it's not acceptable.

If the offer is rejected, you can then 'change your mind' and realise that you can just about afford to offer some more (and repeat that line each time your offer is rejected, until you reach your limit).

SunnyCat

Thank you all for your thorough advice. We put the offer in! Now I'm guessing waiting till after the bank holiday to hear back!