How to make an offer on a house & negotiate effectively

Once you have found a house you want to buy, you then need to decide how much to offer. Do you put in a high offer to clinch it, and risk wasting money? Or a low offer and risk losing your dream home? What's the best way to make an offer and negotiate the price to ensure you get the perfect property at the best possible price?

Angela Kerr Director, Editor

Making an offer on a house in 2024

At the start of this year, it was widely expected that house prices would drop in 2024. But Land Registry data from July shows they are in fact up 2% compared to last year. More recently, Zoopla reported that 1 in 5 homes listed for sale in August had their asking prices reduced by 5% or more to attract more buyer interest.

With so much movement in the market, here’s how to make and successfully negotiate an offer on a house.

Preparation is key

Before making an offer on a house, do your preparation first to ensure you make an informed decision on how much to offer and also that you can afford the property.

– Research local house prices

Before making an offer on a house, research local house prices, from listings on the main portals, to the actual sold prices listed on Land Registry so you understand how much houses like the one you are looking at are actually selling for. This will help to re-assure you that you aren’t paying too much.

Check how quickly they are selling too, if they’re moving very slowly, and going below the asking price, then you are in a stronger position to make a lower offer.

– Get your mortgage in principle

Before making an offer on a house it’s essential to make sure you can afford it. So if you are not a cash buyer with money in the bank ready to go, having a mortgage agreement in principle is advisable. This is an indication that a lender could lend you a specified amount, based on details you’ve provided about your income, spending and debts. This will put you in good light with estate agents when it comes to making an offer.

You should be able to get a mortgage in principle for free. With our partners at L&C, you can get a personalised Decision in Principle, for free, in just a 15 minutes. Find out more in our guide on Mortgage in Principle. Be aware that after an offer is made, the estate agent will want to see proof of funds and verify your ID and financial position. This is all part of anti-money laundering regulations.

How much should I offer on a house?

Your next step is to decide how much to offer on a house. There are two main ways to approach this:

• Start low: This leaves room to negotiate. You are less likely to overpay for the house if you start with a low offer but you’re more likely to need to negotiate. Read on for tactics on how to negotiate when making an offer on a house.
• Making your best offer: You may wish to go in with your highest offer first if you want to avoid a long and drawn-out process and reduce the risk of another buyer pipping you at the post. If you need to make your offer via a sealed bid, you’ll need to give your best offer first. Read on for more on sealed bids.

KEY INFORMATION

How to negotiate on a house price

Avoid paying over the odds when you’re making an offer on a house with these 8 tips on how to negotiate on a house price:

1. Don’t give your financial hand away: When first contacting estate agents, downplay the amount you are willing to spend. Estate agents tend to show you homes that are slightly above your limit, and it will put you in a stronger position when it comes to negotiation. Likewise, if you fall in love with a property when viewing it, don’t declare that you’ve finally found your forever home. By being too keen, the agent and seller will think you may be willing to pay more. Play it cool, and ask questions that will set you in good stead for the negotiation process. See 25 questions to ask when viewing/ buying a house and What to look for when viewing a house.
2. Start low: When you are making an offer on a house, a good rule of thumb is to offer 5% to 10% lower than the asking price. Sellers often take this into account and market their property for more than they would accept. The agent will normally tell you of any bids that trump yours, and give you a chance to offer a second or even third bid.
3. Beware of offering above the asking price: You should only offer more than the asking price if you know the seller has already been offered that, or if you are really worried about not getting your once-in-a-lifetime dream home and you think there are lots of other buyers.
4. Stay polite and calm at all times: You’ll only alienate everybody if you get irritated.
5. Play hard to get, but stay realistic: If you think the seller is desperate, it is not in your interest to appear too keen.
6. Consider contacting the seller directly and negotiating in person: But remember they could be harder to negotiate with than the estate agent who wants to close the deal as soon as possible.
7. Don’t be overly influenced by other things thrown in with the deal: For example, unless very new, second hand white goods are usually worth very little and it’s often less hassle to sell them with the house than move them.
8. Consider using a buying agent: A buying agent’s job is to find their client the property that best fits what they are looking for and give an informed view of the property’s value. They’ll negotiate the price too. Read more about how buying agents work, cost and how to find one in our guide Buying Agents Explained.

When making an offer on a house, have your conveyancing solicitor lined up ready to go:

Can I make a cheeky offer on a house?

Yes of course. But it may damage relations so think carefully before you do. There are certain circumstances when a seller is more likely to accept a bid lower than the asking price – and may even go as far as accepting a cheeky offer of say 10-15% below the asking price. Here are some of instances when a low bid is more likely to be successful:

• The house has been on the market for a long time: This suggests they are having problems selling and other people think it is overpriced. Has the asking price dropped since it was put on the market?
• The seller wants to sell quickly: For example, this could be the case if they are looking to buy a specific new house but are caught in a chain, or if they are having to move to follow a job
• You’re the only buyers interested in the property: The seller will realise you are probably their only hope
• Timing: You suggest a completion date that works for the seller
• You can act quickly and are a more certain buyer: If you’re chain-free, because you are a first time buyer, you’ve already sold your home or you’re a cash buyer, you’ll be able to move more quickly and won’t have the risk the chain could fall down and jeopardise the sale. Read our guide Should I sell my house before I buy a new one?
• The estate agent wants a quick sale: While the agent works for the seller and is looking to sell for as much as possible, they are often looking for a quick sale without too much effort, in order to collect the commission. The estate agent may be more likely to want to persuade the seller to accept a lower price if they’re using multiple agents to guarantee they get the commission rather than another agent. Read our guide Multiple agency agreements: Does it help?

How to make an offer on a house

To make an offer on a house you must tell the estate agent. By law estate agents have to pass on every offer they receive to the seller. Phone the estate agent to make your offer and follow up by email to ensure you have a formal record and to reduce scope for confusion or argument later.

When making your offer, be sure to emphasise your position. If you are in a strong position, such as if you’re chain-free because you’re a first-time buyer or you’re a cash buyer, then make this clear as this will make you more attractive to sellers who want to avoid long chains and possible delays. Get quotes for a house survey and have your conveyancing solicitor lined up ready to go. If you sound like you’re on the ball and keen to move soon, that will also help your case.

What happens after you put in an offer depends on whether:

1. your offer is accepted, in which case, congratulations – you’ll need to proceed with the next step of your purchase (read on for what you’ll need to do next).
2. your offer is rejected. If this happens to you, you’ll need to get ready to negotiate. The process will be handled by the estate agent. As a buyer, this puts you at a distinct disadvantage – the seller has a professional negotiator (the agent) working on their behalf, while you’ll be on you’re own. If you’re worried about this, you can appoint a buying agent. The number one rule before entering into negotiations on a house is to decide on the maximum amount you want to spend on the house. Don’t forget there are extra costs of buying a property which you’ll want to factor in to your budget.

Video – How to make an offer on a house

Be ready to proceed once your offer is accepted – find your conveyancing solicitor:

Sealed bids and making an offer on a house

If the house you want to buy is going to sealed bids, you will have to write down your offer, seal it in an envelope and give it to the estate agent. The estate agent will give all the bids to the seller who will usually choose the highest.

Sealed bids are designed to get a high price for sellers as buyers, worried they will be outbid, put in their highest offer. As a result, sealed bids often result in the home selling for more than the asking price. In some areas where demand is particularly high sealed bids are more common.

Bidding via sealed bids can be stressful. So keep the following in mind when you decide how much to offer:

• Don’t be tempted to offer more than you think the house is worth to win the bid. Not only may you be paying over the odds but if your mortgage lender decides you’ve agreed to pay too much and down-values it, you may struggle to get a mortgage .
• Always offer a few more pounds and pence than a round number. For example, offer £375,050 rather than £375,000 just in case another bidder offers that round number.
• Emphasise your position in your offer. While many sellers will simply go with the highest offer, some may be prepared to accept a lower offer if for example you’re a cash buyer or chain free.
• If you the seller goes with another buyer, it’s worth staying in touch with the agent in case the sale falls down.

See our guide on Sealed Bids for tactics to help ensure you don’t overpay and increase your chances of a successful bid

Can I make an offer on a house that is Sold Subject to Contract?

If a house is listed as Sold Subject to Contract SSTC you can still make an offer on it and an estate agent is legally obliged to pass on any offers they receive to the sellers unless they have asked them not to. The seller can consider any offer until the sale becomes legally binding at exchange of contracts.

If you make an offer on a house and it’s accepted, after a sale has already been agreed, this is known as gazumping (not to be confused with gazundering). In most cases gazumping happens because a higher offer has been made. But in other cases it could be down to timing, such as if the original buyer is taking too long to have a survey, the seller may decide to reject the original offer in favour of one from a buyer who is in a better position to move more quickly.

Do I need to pay a reservation fee when making an offer on a house?

No, not normally. This should only really apply when you’re buying a new build property or buying a property via the Modern Method of Auction. Read our guide on Reservation fees explained.

After your offer has been accepted: 5 things to do straight away

There are a number of steps you’ll need to take as soon as possible after your offer on a house has been accepted.

1. Get the seller to take the property off the market

The seller should take the property off the market if they are serious about accepting your offer. This reduces the risk of gazumping. The seller does not have to, but if they don’t, then ask why they are still marketing their property, and be careful about spending thousands of pounds on surveys, solicitors and arranging mortgages.

2. Start the legal process of buying your house

Once your offer has been accepted, you’ll need to find the right solicitor or conveyancer and instruct them to start work on the legal side of your purchase.

Don’t just choose the conveyancing solicitor recommended by the estate agent for the house you’re buying. Be sure to compare conveyancing quotes to make sure you get the best service at the best price. And make sure you respond quickly to your conveyancing solicitor queries and return paperwork promptly.

3. Arrange your survey

Once the offer you have made has been formally accepted, you should also arrange your house survey. There are lots of different types of survey including homebuyer surveys and building surveys so research your options and get an idea of prices in our guide on How much does a house survey cost?

It’s advisable to book your survey early because it shows the seller you are serious. You can get quotes from local qualified surveyors and compare today so you’re ready to instruct when the time comes.

4. Apply for your mortgage

Once your offer is accepted, if you’ve already got your Mortgage in Principle in place, go back to your mortgage broker and start your full mortgage application. See our guide How to make a successful mortgage application. Then you’ll need to wait for your lender to make you a formal mortgage offer. See our guide How long does it take to get a mortgage?

If you haven’t got your finances in place by this stage of the process, you must now scramble to do so as quickly as possible, before the seller loses patience.

Also, when you’re buying a house with a mortgage, it is also a good time to consider getting life insurance. See our guide Do I need life insurance?

5. Beware of gazumping

Even after an offer has been made and accepted by the seller, it’s not legally binding on either side. Either party can still pull out until the exchange of contracts, although the buyer might lose their reservation fee if they were required to put one down. (this applies to England and Wales; there are different rules in Scotland).

In fact, research in 2024 by the lenders MFS showed that a staggering 37% of homebuyers in the last 10 years have been gazumped at least once.

You could lose thousands of pounds in pointless survey fees, land search fees and solicitor’s fees if you’re gazumped. So it’s a good idea to take out Home Buyers Protection insurance. This helps cover legal, survey and mortgage lending costs should your purchase fall through

Frequently Asked Questions