I’ve never met anyone who enjoys paying more than what they should have for something, and that’s particularly true when it comes to very large purchases like a house or car.
So does that mean that, when you’re making an offer on a house, it’s worth trying to put in an extremely low offer to see if you can get the property for a steal? Everybody loves a bargain, after all. But, in a word, no.
To find out why, we don’t need to look any further than that little website called eBay. When I’m not writing for blogs like this one, you can usually find me ransacking my loft looking for things to sell on the site.
I won’t generally list products for more than what I would expect to pay for them myself, but I also accept best offers. When someone places an offer that’s a fraction of the asking price, it actively annoys me to the extent that I’ll counter with something ridiculous like a penny less than my original asking price. Childish, yes, but fun.
When it comes to talking about homes it’s far more likely that a seller will simply ignore your offer altogether and, unless you come back later with a very good offer, it’s unlikely that they’ll consider your future offers either.
If this is your dream home we’re talking about, getting blackballed for putting in an insultingly low offer isn’t a very smart move. 5-10% lower than the asking price is a good figure to start with, but you can never really tell what will be accepted or rejected.
Of course, this whole thing goes both ways: if you price a property at £50,000 above what similar homes in the area have sold for, then you’re inviting silly offers by being unrealistic.
Speaking of which, both the buyer and the seller should be looking at what comparable homes in the neighbourhood have sold for – this is the best way to temper expectations as a seller and calculate a fair offer as a potential buyer, and makes it far more likely that you’ll agreeably meet in the middle.
Once you’ve made your offer, be sure that you don’t pester. A fair offer should speak for itself, and following up with lots of phone calls or emails will only lead to one of two outcomes:
- The seller/agent will sense your desperation and reject your offer because they know that you’ll go higher
- They’ll find your persistence off-putting as it hinders them sorting through the offers that they’ve received
Don’t be afraid to negotiate, or place additional offers, especially if you think that the seller is considering others that may be higher than yours.
If an offer is accepted, being asked to place a holding deposit is normal, and making clear that you’re willing to do so earlier in the process will be seen a positive, but be sure you’ve read the small print so you know what happens to it if the sale falls through.
Making a good offer is a difficult skill to master but, fortunately, it’s one that most of us will need to use just a few times in our life. Still, that’s all the more reason to make sure you get it right!