When to accept an offer on your home?
Accepting an offer on your house or flat is a big decision. You should take into account the current state of the market and what similar properties nearby have sold for, as well as your own buying situation.
If you’ve put your home on the market fairly recently, you may be tempted to hang tight for a better 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, Pittis are 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 you receive an offer that’s below – or indeed, well-below – your asking price, your immediate reaction can be anything from quiet disappointment to down-right incredulity. However, if this happens to you, remember to take a breath and consider carefully what yoiur next moves should be.
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 buying a new home that's contingent on selling yours.
So, keep an open mind. There are certain situations when accepting a below-asking-price offer is acceptable. For instance:
When it’s a first time buyer making an offer
When it’s a first time home buyer making an offer, you may want to think twice before rejecting them completely. First time buyers are deeply desirable since they have no chain and so, are probably 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 are property cash buyers
Depending on how you view it, a cash buyer could be the most desirable candidate of all.
So, what does a cash buyer mean? Essentially your buyer can afford 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 hinge on the outcome of either of 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 valuation figure 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.
Is negotiating house price a possibility?
Absolutely. 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 consult them first.
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 final decision.
Next, have a figure in mind that’s below your asking price, which you’d be willing to accept. 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.