Here we look at specific things you can do to improve your purchase offer from a seller’s /Agent’s perspective and it could be the difference between being successful or not in your proposed purchase.

With the housing market heating up, and no signs of that cooling in 2021 due to the amount of stimulus in place such as the 95% mortgage guarantee scheme & Stamp Duty Holiday. Even if you are not directly benefitting from those schemes, there will be a knock on impact of huge buyer demand, at a time of more limited housing stock, so being in a position to buy when you find “the one” has never been more crucial.

Step One: Get your dream team in place

  • It is stating the obvious, but when you go looking to make a large purchase it makes sense to understand what your budget is, and what all the associated costs will be BEFORE offering on a property. That is why engaging with a broker is so crucial at the outset who can get the lending agreed in principal for you well ahead of finding a property and so help improve your purchase offer.
  • If you are in a strong financial position you may not feel it necessary to do this, which is understandable, but you also have to appreciate you are going to be dealing with sellers/Agents who have no idea who you are. So a third party such a broker, who can verify your position really sets you apart from someone who hasn’t taken the time to do this.
  • If your situation is more complex, and things that are deemed complex in the mortgage world are outlined below, then this really should be your starting point. Lenders are still extremely cautious as the impacts of Covid on the economy will have a long lasting influence, so please do make this your first port of call so that you don’t come up short of what you would like to spend, or it ends up costing more than you thought
    • “complex” things for a mortgage would be – use of bonuses or variable income like commission | Being self employed | Being a Non-UK National | Having past credit issues, down to even one late payment in the last 2 years | having a deposit of less than 25% – if you tick one or more of these boxes, it will pay to get your finances straight before offering on a property.
  • Also, it is worth identifying which legal firm you wish to use. While they can’t do any work until you have found a property, do the beauty parade in advance. Check they are on lenders panels to carry out the work they need too and you like who you will be working with! Having a responsive, pragmatic solicitor on your side can be the difference in making a purchase happen or not, especially the higher the value of the property. Brokers and estate agents are a good source of recommendations, as will be friends who have used a firm recently and who have first hand experience of dealing with them.

Step Two: Do your research

  • So much can be done online now it can save you a lot of shoe leather and wasted visits when seeking to improve your purchase offer.
  • Work out your priorities – schools/travel links/green space/gardens/size and type of the property – all crucial factors in driving your search and often best considered before you even look at any property. An age old dynamic is that the further you get out of town, the further your money goes, so what point on that sliding scale do you want to be?
  • Settle on your area. You can end up chasing your tail at looking at a larger property out of town, vs a smaller place that is more centrally located. As alluded too above, set out your requirements and stick to them. This will save a lot of heartache/torment, as if you don’t, you aren’t comparing apples with apples and that makes life very hard.

Step Three: Hit the road

  • While you can do so much online now with virtual property tours, loads of pictures, Google Maps etc, nothing beats hitting the streets to see the property ‘for real’ (assuming it is safe to do so). If you know the area very well, you can perhaps cut down to a shortlist online, but viewing the property is always recommended before offering.
  • Always consider that not all properties are on Agents websites, so only their registered buyers will get notifications/calls about new property to the market and ones that have become available again after a sale breaks down for whatever reason. These are often the best deals. You can’t do everything online in the property game.
  • If it is a new area, make sure you visit at night to see what the area is like ‘after dark’. Are hooded youths marauding the streets, or is it a family friendly community. You’ll only know if you go and look yourself. Why not tie that in with having a meal/drink in the most local pub (again, when allowed too) as that will tell you a lot about the local residents and if you feel you’ll fit in there.

Step Four: Make an offer

  • Once you have worked the above steps as required and you have identified a property you wish to buy, do not hesitate in getting your first offer in. If you procrastinate others can beat you to the punch.
  • We have worked with many agents over the year and they all agree that – a low offer is better than no offer – so our view is always – go in low on your first offer, in fact, if you aren’t embarrassed by the number you are offering, you have probably gone too high. What is the worst that can happen? They just say, no and ask you to come up. That isn’t that painful and you never know the buyers situation so no harm testing the water. It is important to note that as the market heats up, prime property may well go at or over asking price, in fact we have even seen sealed bids make a recurrence (see below for more info on that), so understanding the market you are looking at is crucial, and there is quite frankly no better way than getting your first offer in so you are part of the conversation on that property. Always submit your offer in writing:
  • A Template Email could read:
    • Thank you for your time in showing me {insert Property}. I/We are very interested and would like to make an offer on the following basis:
      • Offer Price of {insert number}
      • Our finances are in place and the loan agreed in principal. Our mortgage adviser at Rose Capital Partners can verify this and will get the survey underway once we are agreed
        • {insert broker details}
      • I would like to use the following legal team for the purchase
        • {insert solicitors details}
      • I/We will have a deposit of {insert % or £ amount}
      • This offer is conditional on
        • {insert any special conditions such as sale of your current property/another property or asset/set timeframe in which you want to complete by etc – it is always good to make your move date clear at the outset as this is often a major sticking point unless both sides are in a position to move quickly}

All being well, and by following the steps above, you will have secured the property of your dream! (or at least the best your budget allows). In a competitive market it is crucial that you go in prepared, and try to improve your purchase offer as it will set your offer out against someone who hasn’t done the groundwork. Moreover, it will make the purchase much easier and less stressful. Especially if you are a First Time Buyer, asking all the questions you need, and having all the links in the chain in place, will really make the whole thing run smother.

To talk to one of our team on how we can get the loan agreed for you, help set your budget, and help improve your purchase offer, please feel free to get in contact and we would be delighted to help.

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