Demand for property is outstripping supply, placing more potential homebuyers in a bidding war. If you’re looking to move and are facing competition, there are some things you can do to boost your chances of success.
More than a third of homes are receiving at least three offers, according to This is Money. A lucky one in five sellers is receiving offers from five or more buyers, providing an opportunity to sell their home for more. In some areas, competition for property is even higher. Some 65% of homes in Scotland and 48% in Yorkshire & Humber have received at least three offers.
If you’re hoping to sell your home, competition in the market is good news, but it can be frustrating if you’re buying. Taking some steps to make your offer more attractive could help your offer get accepted. Here are five things you can do.
1. Have a mortgage in principle ready
A “mortgage in principle” is an official estimate of how much a lender will allow you to borrow through a mortgage. While it’s not a guarantee, it indicates that you’re in a position to borrow and that the application process will be smooth. Having a mortgage in principle to hand can give buyers confidence in your offer, especially if they’re hoping for a quick sale.
A mortgage in principle is often used by first-time buyers, but that doesn’t mean you can’t secure one if you already have a home. If you’re hoping to increase the amount you borrow significantly, it can be useful.
When you apply for a mortgage, you don’t have to use the lender you have a mortgage in principle with. However, taking some time to understand lending criteria and interest rates now can be invaluable. The amount providers will be willing to lend you can vary, so picking the right one could make all the difference in a bidding war. If you’d like help when organising a mortgage in principle, please contact us.
2. If you’re not in a chain, highlight it
It’s not always about more money when a seller is choosing between several offers. In some cases, they may want to sell the property quickly. If this is the case, not being part of a chain can make you more appealing. A chain occurs when homebuyers and sellers are linked because their purchase or sale is dependent on another transaction. For example, you may only be able to buy the property you want if a sale on your current home goes through.
This can put first-time and cash buyers in a good position when there is competition in the market. Without a chain slowing down the process, you can complete a property sale in a matter of weeks rather than months.
3. Organise your solicitor before putting in an offer
Usually, you’d contact a solicitor after an offer has been accepted to start moving the process forward. But like having a mortgage in principle, having a solicitor organised from the outset can make your offer more appealing and demonstrate you’re serious about buying the property.
4. Put your offer in writing and add a personal touch
While selling property is a monetary transaction, homes hold a lot of sentimental value. Sometimes, giving a seller some personal details and explaining why you want this property, in particular, can sway the decision in your favour.
Often, you’ll provide verbal offers through the estate agent. Putting it down in writing can make it seem more tangible to the seller and allows you to make your offer about more than just a figure.
5. Be ready to increase your offer
While the above steps can make your initial offer more attractive, if other buyers want the property, be ready to increase your offer and negotiate.
Some sellers will come back with a counteroffer, others will ask for final offers. Think carefully before you submit a new offer, you may also want to negotiate other terms. For example, would you be willing to pay more if they left some furniture or updated certain areas of the property?
That being said, be prepared to walk away too. Think about what the home is worth and what you can afford. Putting in a higher bid can be tempting when you’ve fallen in love with a property, but it can mean you lose the property further down the line when your mortgage isn’t approved. Remember: there will be other homes.
If you’re hoping to buy a home, whether you’re a first-time buyer or moving up the property ladder, we’re here to help you. We can offer advice right from the beginning of the process, including securing a mortgage in principle and helping you negotiate if necessary. Give us a call to arrange a meeting.
Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.