When you have an interested buyer and you’ve done a viewing the next step is receiving an offer. If you’ve had an in person or virtual valuation you’ll know how much your property is worth based on local market conditions but it’s good to do your own research too, or refer to the Zump estimate
Key factors determining price
As with most markets, house prices are determined by demand, your property is worth what someone is willing to pay for it. So look at what prices similar properties are selling for in your area. You can also use your Zump insights to get a good understanding of this.
Check the prices of similar houses
See how long homes are on the market
See if they are being sold below asking price
If similar homes are selling quickly for around the asking price you can be confident that your home and area are in high demand and can expect offers around your asking price. If homes are taking a long time to sell and are being heavily discounted you can expect lower offers.
Receiving And Negotiating Offers
Most initial offers come in 10% below the asking price. Most sales take some back and forth negotiation so don’t take this personally.
When you receive an initial offer you can either counter with a higher amount that’s still below your asking price, counter with the asking price or reject the offer outright.
Counter
If you counter with another amount you’re showing flexibility and a willingness to work with the buyer to find a price that works for both parties. You are committed to selling your home for lower than the asking price but this is how a majority of house sales work.
Stick to the asking price
When you stick to your asking price you send a message that you know how much your home is worth and you won’t accept less. However this is high risk as it may turn buyers off and could result in your property remaining on market for longer, weakening your position.
Rejecting offers
If the offer is significantly below the asking price you could reject it and ask them to submit a new offer. This is a stronger position than countering their initial offer but is not as rigid as sticking with the asking price. They may not submit a new bid, but if they do it will be closer to the asking price than previously, helping with the starting point in negotiations.
However you choose to negotiate, always remember to be friendly, polite, calm and not to take it personally.
Things to consider when negotiating
There are many reasons why you could either accept a higher or lower offer depending on your circumstances.
Do you have many bidders or just one? High demand means you can expect a higher offer.
Has your home been on the market for a while? If so this indicates that your price is too high and you may need to lower the price.
Do you need to sell quickly to complete on another property or to move for work?
Is the buyer ready to act quickly? Do they have all finances in place and are they part of a chain? These buyers are less risky as they aren’t dependent on external factors that could slow down the process and leave you stuck.
Accepting Offers
When you reach an agreement with the buyer you can officially accept the offer. This is still not legally binding but your home is Sold Subject To Contract, which means you’ve accepted an offer. However nothing is legally binding until contracts are exchanged.
At this point you should make sure your next home is ready. Either you’ve found a property and are ready to move or you’ve found rental accommodation.
Now it’s time to create a sales memorandum which will need solicitors to be involved.