A little knowledge of offer etiquette will always stand you in good stead if you are buying, or even selling a property. So, here is some advice and tips from us on the do’s and don’ts of offers. Find out more…
Be honest about your buying position
Honesty lies at the heart of good offer etiquette when buying a property. You should always provide your chosen estate agent with details of your position. By this, we mean being clear about the finances available to you in the form of equity, loans, and cash. Your estate agent will expect proof of these funds in the form of bank statements, an approved mortgage, or details of the property you are selling.
You should always explain your reason for buying and offer a realistic timescale you can to work to. A good estate agent will need to understand your circumstances so they can correctly match you with the ideal property and vendor’s position.
Consider the vendor’s position
This leads us to how and why it is important to consider the vendor’s position and timescale. Can you work within their required timescale? You don’t want to put yourself under any pressure. If you don’t do this, you might have to move temporarily to a rented property or put yourself in a position where you hold up a chain.
Good offer etiquette means being honest with everyone, then those with connected sales can decide if this is feasible for them. And by carefully considering whether your timescale matches up with those in the chain, means you can avoid the house sale falling through mid-sale.
Look at your financial position and affordability
It can be easy to get carried away with offers to secure your dream home. But, you must consider if the maximum budget you gave to the estate agent at the start, is realistically achievable. Your offer is for the house which is sold as seen. The property might require renovation or redecoration which you must remember are costs in addition to your offer.
So, you need to make sure you have the funds set aside for the works you hope to carry out. The vendor is not concerned about what you do to the property once you purchase it – that is your business. The offer you submit relates to the house as it is now.
Consider demand when making an offer
We recommend looking at how quickly similar properties have sold for in the location you hope to buy in. Are there similar properties available for sale? What was the rise in prices over the last year?
Have you chosen this area because it has everything you need: local schools, transport links, local amenities, high rental yields? The chances are other people are thinking the same.
In areas like these you need to act quickly. Plus you will likely need to offer the asking price to secure the property.
If the demand for a property is exceptionally high and the estate agent is conducting a large number of viewings, you may end up in a bidding war. In this scenario you might have to pay significantly over the asking price. However, if the property has been on the market for a while, then it is more likely the vendors will be open to negotiation.
To ensure good offer etiquette, you should decide what you want. If you don’t want to pay top dollar, then look for a property in a lesser known, up and coming area. If you wish to live in a sought after location, you will have to pay the price and be prepared to act fast.
Be organised with your proof of funds
As we mentioned, your estate agent will expect you to provide proof of funds and solicitors details along with your offer. If you are not prepared and another buyer is, you could miss out on the opportunity. An estate agent will favour those who are organised and likely to be easier to deal with. As part of good offer etiquette, it pays to be on the ball and ready to jump on an opportunity.
Submitting an offer
When you submit an offer to an estate agent, state the price clearly and give the full reason for offering that amount. If you have decided it is the maximum amount you can offer, then make that clear. The vendor will be made aware that your offer is non-negotiable. On the other hand, time wasting is most certainly not good offer etiquette.
When making an offer, reiterate again, in detail, your buying position and any flexibility you can afford. If you try and negotiate an offer down once you have agreed a price, this is called ‘gazundering’ and is deemed underhand. Gazundering can lead to the fall through of not just your sale, but also the vendor’s purchase, and any others if you are in a chain.
Vendors make clear what’s on offer
It’s good offer etiquette to be as clear as possible when selling your home, as to exactly what is on offer. Do you have further terms attached to your offer? Perhaps your sale will include white goods or the curtains. Or maybe you will agree to repaint the lounge or mend the fence before the sale completes. The earlier you can make these clear to your estate agent, the better.
Change of situation
If, at any point, your position should change, then inform your Solicitor and Estate Agent immediately. The earlier you do so, the more problems can be avoided for other parties further into the sale. There might be a way your change in circumstances can be accommodated. But the longer it is left without communication, the less likely a solution can be found. And the more upset you will be causing in the chain. Always remember – honesty and openness forms the best offer etiquette, for all parties.
If you’re worried about good offer etiquette, then you need a knowledgeable estate agent in your corner to assist you. Our exceptional feedback from local homebuyers and sellers proves we are reputable property agents to work with.