At Seeff we always say that the best time to buy property is ‘yesterday’, since the longer you leave it, the more you lose out on the benefits of capital growth. However, timing is always critical in any bargaining process – and this certainly applies when it comes to putting in an Offer to Purchase on a property that you have in your sights.
The two main factors that you need to know in order to get your timing (and the amount) of your offer right are:
- 1. How long has the property been on the market? A general rule of thumb is that the longer it has been for sale, the more likely it is that the seller will accept a lower offer. If a property has been on the market for a long time – for example, more than 6 months in a popular area, it may be overpriced. If there are lots of desirable properties in a particular area or development that have been on the market for a long time, you should find out why. Of course in the current market, for example, holiday homes are sure to sit on the market unless offered at a tempting price.
- 2. Why is the property being sold, and how desperate is the seller to sell it? Your estate agent will be able to tell you whether the owners need to sell by a certain date or for a certain reason, and what kind of offer they are likely to accept. Often the neighbours will know why a property is being sold, and all of this information will help you to decide on what to offer and how soon to do so.
On the other side of the coin, you should not reveal to the seller that you are desperate to buy their property or in a hurry to seal a deal. It is all a question of perception – which can see a lower or higher price being deemed as acceptable, or an early offer being gratefully snapped up (or not). Jan Vermeulen, Licensee of Seeff Queensburgh, advises as follows: “It is also very important that the potential purchaser makes a valid and reasonable offer on the property. Making a ridiculously low offer could result in the seller accepting another, more acceptable offer, without counter-offering the first offer – resulting in that buyer losing out. “Sellers tend to know what they want or need when selling – and this figure could differ from both the current market analysis and the estate agents’ advice. The result here will be that the property may sometimes be overpriced, which will not attract the correct buyers in the shortest possible time at the best possible price.”
When all of the above is taken into the account, your estate agent will be able to advise on when to go ahead and make an Offer to Purchase, as well as how much they think will be acceptable.
However, before finally deciding on the price you are prepared to offer, it is vital that you know exactly what is included. Have all fixtures and fittings to be included listed in the contract. We have heard stories of properties being stripped before being handed over, with even sanitaryware and light fittings being removed.
A note of advice: If you make an offer that is regarded as ‘too low’ (not ridiculously low) by the seller, you can always raise it, but it is pretty impossible to lower an offer once it has been accepted. Also, if your first offer is accepted without discussion, you will never know how low you could have gone! If making a lower offer, indicate a few points as to why you think the reduction is warranted. If your offer is rejected, it may be worth waiting a week or two before making a higher one – depending on how active the market is, and how keen you are to buy a particular property. Always rely on the advice of an estate agent with experience in the area in which you are looking to buy.