Receiving offers on your property can be a very exciting time, but it is always good to keep level-headed to make sure you get the right offer for you.
Considering the offer
It is normal practice for buyers to offer 5-10% less than the advertised asking price so don't be surprised if initial offers are a little low.
There is no need to accept or reject an offer straightaway, it is perfectly normal to think things over for a day or two. You could even check local sold house prices to get an idea of what other properties in your area have gone for.
It is a good idea to find out from your estate agent the buyer's position first before making any decisions as there are other important factors to keep in mind when deciding who to sell you house to. Here are three key questions to ask are:
What is the financial position of the potential buyer?
It is worth knowing what position the buyer is in. Find out whether the potential buyer has to sell a home in order to move, as this could delay speed of sale. If they are a cash buyer, this is often seen as a positive as it suggests a faster sale. If they are not a cash buyer and need a mortgage for the sale, it is worth asking whether they have a mortgage in principle approved. If you have offers that are quite similar in amounts, this information could be very useful.
What are your buyer's timescales for moving?
Similar to the buyers financial position, it is good to get an idea of what sort of timescales the buyer is looking at in terms of completing the sale. Are they currently part of a chain? Depending on how big the chain is could add delay to completion. If the buyer is a cash-buyer of first-time buyer it might be worth asking how quickly they are looking to move and how flexible they are on a move date.
Also consider your own position
Do you have to move quickly in order to secure your next house? If so then you may be more interested in accepting an offer from buyers who are not part of a chain. If you are in no hurry to move, then you could hold out for a higher offer.
A buyer who is not part of a chain and who already has a mortgage approved is a more favourable purchaser than someone who needs to sell their own home in order to fund the purchase, and who hasn’t yet got a mortgage approved. Similar with a cash-buyer, as they have the money in the bank ready.
Discuss your considerations with your estate agent who are there to guide you.
Accepting the offer
If you do accept an offer it is usually ‘subject to contract’, which means as long as a survey doesn’t throw up any surprises, the buyer will most likely complete the sale. Offers will also only be made official once your estate agent can prove the buyer has the finances to purchase.
An accepted offer is not legally binding until contracts are exchanged. This means a buyer can back out of the sale at any point up until contracts are exchanged. This is also the same for the seller.
You might want to know
What is Gazumping?
Gazumping occurs when a seller accepts an offer to purchase on the property from one potential buyer, but then accepts a higher offer from someone else