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  • Step 1c - Find a Property: Agreeing an Offer

    3rd October 2017

     

    You make or lose money when you purchase, not when you sell. Do your research to make sure you come to the right offer. A good offer is one that is a fair market price where both parties meet half way between what they are willing to pay and willing to accept. Remember, an accepted offer is not legally binding – you have time to carry out surveys and legal checks before it is at exchange of contracts.

     

    Three in ten (30%) sales collapse before exchange of contracts (Which). This is for two main reasons. Firstly, because a survey shows up issues that you are either not willing to take on or cannot agree on a new price that allows for funding their repair. But it can also be because a buyer has reluctantly been pushed to the top of their budget or a seller has been pushed to their lowest price later deciding that they are not comfortable with the price. Setting a fair offer reduces the chance of either party wanting to Gazunder, Gazump, gazang, or walk away and therefore saves you time having to search for another property and money on more surveys and conveyancing.

     

    Gazundering: the buyer is tempted to change their offer just before exchange of contracts, threatening to withdraw if the seller doesn’t accept a lower offer

    Gazumping: the seller is tempted to accept a better offer just before exchange of contracts despite the investments you’ve made into conveyancing and survey

    Gazanging: the seller withdraws in the belief that the market will improve in a few months and they will get a better price

     

    The strength of your offer depends on how risky you are to the seller – a cash buyer with no chain? You provide more guarantee of a sale completing which may mean the seller is willing to accept a lower offer. If the seller hasn’t had the property listed for long and isn’t in any rush to move, your offer will need to be higher to encourage them to sell.

     

    Matching these factors with research into recent sold prices for similar properties in the area, current property listing prices, market conditions and your own notes from your viewing checklists allows you to put forward a reasonable and justifiable offer.

     

    Move on to Checking the Property or go back to Property Search.

     

    Progress: 33% complete

     

    Sources:

    3 in 10 transactions fall through before exchange – Which? – http://www.which.co.uk/news/2016/06/three-in-10-property-purchases-fall-through-442589/