It’s true that almost everything about buying a property is daunting – including having to make up your mind about how much to offer and pay. Whether you’re new at this or an experienced one, you often find yourself asking the same question:
Are you offering too much and losing a huge amount of money in the end? Or you might wonder if you have somehow offered too low that the seller just pulls out of the arrangement.
When it comes to making an offer to buy a home, you’re the only one who knows what’s best for you and you can only get that if you’ve done your homework.
You can begin by having a look at the housing market and check the average selling price of properties in the area where you’re looking to buy. Checking online listings or the Land Registry website can help you with that bit, too.
Next, compare the prices to see the difference. For instance, if you come across some that are quite different in size from the one you may have sold in the past, estimate the square footage adjustment. It may not come in very handy at all times though, as other factors like the state of repair of the property affects its selling value, too.
You should also remember that sellers may often put a percentage more than what they are willing to accept. So, there’s a chance you might be missing out a chance to negotiate if you give in to their asking price.
It will help if you learn about how the property’s history went in terms of the attempts to sell it.
Was there any change in sales/estate agent all the while that it was in the market?
Did a previous sale fall through?
Was there any change in the asking price?
If you want to find out more, you can try snooping around a little bit. Have a small talk with rival agents and listen to what they have to say, particularly if the property used to be on their list but failed to close the sale. They are usually very honest about how the property becomes difficult to sell and you may use that difficulty to your advantage. The thing is if the seller finds it hard to sell the property, they are likely to accept a lower offer.
If you are bold enough to cut down your offer based on the results of the survey, you can do so. You may take into account major repair and maintenance costs that you will shoulder and talk to the seller about it. For instance, if you will need to spend a few thousand pounds on changing the roofing of the property, then slash it off your offer. There is always a 50/50 chance of the selling giving in or backing out though. If you want, you may reduce your offer without having to slash the full amount of repair and maintenance costs.
Besides learning from rival agents, you can also talk to the neighbours or try to get in touch with the previous owners and see if there is no hidden nasty stuff about the property to affect its price.
And lastly, always take note that every property is different from the other and that it’s worth what you are willing to pay for it in the end. They’re not like cars where several or even hundreds of units are made of the same model and are often sold at the same price. A property’s selling value still depends on a lot of factors – where it is situated, the condition of the entire house, the safety and security of the surrounding areas, etc.
You may find it impossible to come up with a definite amount to offer the seller but it pays to do a little research and keep your excitement to buy a little toned down, so you will not end up paying way too much you feel you’ve been ripped off.