Working out how much to offer
How much can you afford to spend?
Before even starting to view properties, it's important to work out an accurate budget to avoid falling in love with somewhere you can't actually buy.
While online mortgage calculators can give you a rough idea, it's much more useful to talk to an independent mortgage broker, who will be able to check how much you're likely to be able to borrow based on your personal circumstances.
Which? Mortgage Advisers can give you an accurate view of how much you can borrow and advise on whether you should get an agreement in principle.
Once you've found a property you like, it’s also important to factor in how moving there would affect your living costs.
If the property is listed on Zoopla, you'll be able to see estimated running costs including energy, water, insurance and council tax.
What's the market telling you?
It’s important to research the local property market to avoid overpaying. As a starting point, it can be helpful to compare the property you're offering on with similar homes in the same neighbourhood.
You can find out recent local selling prices on the Land Registry website. Bear in mind that property values can change dramatically from year to year, so the most recent prices will be the most relevant.
Googling the address of the property you want to make an offer on may reveal previous listings on property portals. This could give an indication of whether the owners have been trying to sell it for a while and also whether the price has changed at all.
Talk to the estate agent
The estate agent is there to work for the seller, not for you, but they can still be a very useful source of information. Ask them:
- How long has the owner lived at the property?
If they’re moving out after a relatively short time, try and find out why. If they've lived there for a very long time, bear in mind that they may have a stronger emotional attachment to the property and bear this in mind when wording your offer.
- Why has the owner has decided to sell?
They may want a quick sale if, for example, they’re relocating for a new job. A need for speed might mean the price is more negotiable.
- How long has the property has been on the market?
If it’s been on for a while, the owner may be willing to accept a lower offer. If it's been on the market for a long time but the owner has shown no flexibility, this could indicate they're not that bothered about selling.
- Has the owner has found a property to move to yet?
The answer will often be no, as many people prefer to start house-hunting once their own home is under offer, but if they've already got a place in mind this could lead to a speedier process.
- How many people have viewed the property?
This can help you understand how much competition there is.
- Have any previous offers been made? If so, were any accepted?
The agent can't legally tell you how much past offers were for, but they may indicate whether they were close to the asking price.
- What's the minimum price the seller will accept?
The agent might be cagey about this but it's always worth asking. If the minimum price is beyond your top budget and you're really keen to buy the property, you can follow our tips (below) on how to negotiate.
Take external factors into account
It's not just the property itself that will determine its value. Other factors include:
- School catchment areas
- Transport links
- Local infratructure plans - might services improve, or could traffic and pollution get worse?
- Flood zones
- Development applications - a new factory next door might decrease the property's future value while a new-build housing development bring more investment to the area
- Crime rates and how they've changed over recent years
Offering over or under the asking price
Making an offer in a competitive market
In competitive markets, properties are snapped up quickly and buyers are regularly gazumped - meaning that they're outbid by other buyers after their offer has been accepted.
If multiple buyers are interested in the property, it can be worth offering the asking price or even more to avoid missing out.
But even in this situation, make sure you're not paying above the odds - do your market comparison and stick to the budget you've set. Also, keep in mind that high competition means you may be buying at the 'top of the market' - so even if the property has grown in value in recent years, it may peak when you buy and could potentially dip again when the market quiets down.
You may find yourself vying with multiple other buyers at the same time - our guide explains how to handle a 'sealed bid' or 'best and final offer' scenario.
When you make your offer, emphasise factors that stand in your favour - for example if you're a chain-free first-time buyer, or a cash buyer not reliant on a mortgage.
When to make an offer below the asking price
The asking price is just that - the price the owner would ideally like to get for the property. They can set this themselves, and it doesn't have to be based on what the property is actually worth or even what the estate agent has recommended to them.
Sellers will often start with a high asking price if they're not in a hurry to move on the offchance someone will pay it.
It can be worth offering below the asking price if you know:
- A similar property recently sold at a lower price and the market hasn’t changed.
- There are some repairs or improvements that would need to be carried out for you to be happy in the property.
- The seller has a motive to complete the deal as soon as possible – for example, if they need to move quickly due to pregnancy or a job change.
- The property has been on the market for a while and no one else has made an offer recently.
- You’re not in a chain or you’re a cash buyer – this could make you more attractive to the owner as there's less chance of the transaction falling through due to chain or mortgage complications.
Find out more: our house prices map, which is part of our property value guide for sellers, shows what's happening with house prices in your postcode area.
Video: how the experts decide how much to offer when buying a property
In this video, Which? mortgage adviser David Blake and property surveyor James Rangeley explain how they used their industry knowledge to decide how much to offer when buying their own homes.
How to make an offer on a property
Armed with all the research you've done on the property, area and seller, and provided you're confident it's definitely a property you'd be happy to live in, it's time to make your offer.
First, set yourself an upper limit that you’d be comfortable paying and then, if you're not in a competitive situation, consider going in slightly lower - perhaps 5% - so you have room for upward negotiation.
Assuming the property is being sold via an estate agent, you can make your offer to them either over the phone or in person. You should also submit a written offer (by email should be fine, but check) and ask that it's passed on to the seller.
Needless to say, the most important thing you'll be telling them is the amount you're offering - but you should also emphasise all the other factors in your favour. These might include:
- Having a mortgage agreement in principle (which proves that you can afford what you're offering)
- Being a cash buyer, meaning there won't be any mortgage complications
- If you'll be taking out a mortgage at a low LTV (ie you're putting down a large deposit) - this can make it more likely that your mortgage application is accepted
- Being chain-free, either because you're a first-time buyer or you don't need to sell another property in order to buy this one - this will give the seller less reason to worry about the transaction falling through
- Flexibility on moving date
- Motivation to move, for example being pregnant and needing more bedrooms
- Being organised with a conveyancer and surveyor already lined up
- Emotional reasons - if it's a much-loved family home it's worth saying in your written offer (which should be passed onto the seller) that you loved the property and can envision bringing up your family (or whatever fits your circumstances) there. It might make no difference at all, but it could just be the thing that settles the balance in your favour if you and another person are offering similar amounts.
Make it clear that your offer is subject to the property being taken off the market, with no more viewings conducted, as this will decrease the likelihood of you being gazumped.
If your offer isn't accepted, or someone else submits a higher one, don't panic. Weigh up your options as objectively as you can, and only consider making a higher offer if you're confident you can afford it.
- Find out more: buying through estate agents – learn about your rights.
Ready to buy a home now?
Call Which? Mortgage Advisers to find and arrange the right mortgage for you.
Is my offer legally binding?
If you’re making an offer on a property in England or Wales, your offer isn’t legally binding until you exchange contracts with the seller.
In Scotland, a binding contract will be in place when all the conditions of an offer have been accepted and you and the seller have 'concluded the missives'.
- Find out more: home-buying process in Scotland.
Negotiating on price
When you enter into a negotiation, the following advice can help you get the best price:
- Keep your budget private. Revealing the maximum amount you’re willing to spend may prompt the agent to encourage the seller to hold out for more money.
- Play it cool, even if you've fallen in love with the property. Showing too much enthusiasm may make the agent think you’d be willing to pay any amount to move in.
- If you believe there are structural problems with the property that make it worth less than the owner is asking, it can be worth waiting until you've had a survey done to try and negotiate - then you'll have objective confirmation of the money that needs to be spent.
- Don’t be overly influenced by ‘sweeteners’. Sometimes owners offer to throw in white goods or other fixtures to push up the price, but the items' value will rarely be enough to warrant the extra you'd have to spend on your mortgage.
- Take your time to consider your options. The agent may push you to seal the deal but this is a huge decision and you're entitled to think it over before upping your bid.
If even your best efforts don't secure you the property, try not to be too disheartened. Property-buying is a long-term game and there will be others sooner or later.
After your offer is accepted
After your offer has been accepted, you’ll need to arrange a house survey and to start the conveyancing process before the sale can be completed. Find out more about what happens next in our detailed guides:
Withdrawing or changing your offer
You can withdraw an offer you’ve made before any contracts have been exchanged, as you’re not legally obliged to buy the property.
If you have a survey done and it reveals problems you can try asking the seller to get them fixed before you exchange or offer a lower price - but they're under no obligation to agree to either.
Technically, you can also lower your offer shortly before exchanging contracts - known as ‘gazundering’. While it's legal to do this, it can create a difficult situation for the seller and risk scuppering the sale altogether.
After you’ve exchanged contracts with the seller, you’re legally obliged to pay the amount agreed in the contract. If you pull out of the sale at this point, you may lose the deposit you put down and could be sued by the seller.
If you’re buying in Scotland
After you’ve agreed a contract with the seller, you can’t withdraw or change your offer unless the seller agrees.
If you don’t meet the terms of the contract, you could be made subject to a court order to fulfil the contract and be sued by the seller for any costs they’ve incurred.