What can I offer for a property?

This is a question I’m getting asked a lot by buyers. The answer is, you can offer whatever you want. But there are other things you need to take into account.

The first is, why are you buying the property? If you are buying your family home for the next ten years you will probably be less concerns about ￡’s than if you are an investor looking to make a profit. Often it really is worth paying more to get your dream home!

Next question is what is the property really worth? As an estate agent I will have done a market appraisal on a property and will have put it on the market for around that price. I can list higher or lower than that depending on what the seller is looking to achieve – are they after a fast sale or getting maximum value out of the property? That’s not the same as a RICS surveyor’s valuation, which is the official value of the property that your mortgage company will use. The surveyor comes in after an offer is accepted to assess the property.

This is really important if you are using a mortgage to buy the property. If, for example, we had a house on the market at ￡180,000 and you offered ￡200,000 and the surveyor attended the property and said “it’s worth ￡180,000”, then the mortgage company would ask you to put in another ￡20,000 to continue with the purchase. That’s great if you have the cash, but be wary if you are maxing yourself on a low deposit mortgage.

If you are a cash buyer or have a very small mortgage, the surveyor’s valuation is less of a concern and you can offer what you think the property is worth to you.

Finally, consider the market conditions. In a hot market with high demand for property you may well have to go over the asking price to secure your property. Talk to the estate agent about the property and find out the level of interest they have. If it’s been on the market a few days and they already have asking price offers, be ready to go over asking price. Meanwhile, if a property has been on the market for months and not sold, go ahead and offer below asking. The agent shouldn’t be offended by a cheeky offer on a slow moving property!