by Mark Johnston
Before commencing with making an offer buyers should find out about the property’s leasehold status, for example:
This means the land on which the property is built is part of the sale.
This means the land on which the property is built is not part of the sale and potential buyers will have to pay ground rent to the owner of the land. In addition to the ground rent an annual service charge may be payable.
This means potential buyers can buy the freehold of a flat and also own common parts of the building jointly with other flat owners. Ground rent or a service charge is not payable, however a share of the commonhold associations expenditure is payable.
When making an offer buyers should be aware that they do not have to pay the price asked by the owner, it is common practice for buyers to try and negotiate a better deal.
Buyers may want to offer less if, for example, they think there are any repairs to be done before they move in. Ultimately though the ability to negotiate a better deal will depend on the level of supply and demand in the local market.
Other factors that might support a discount are:
– length of time on the market
– hurry to sell, often sellers have financial, work or family pressures that require them to sell quickly
– Buyer’s status, sellers like to do business with first time buyers and those who are not already in a chain. So let them know!
When it comes to making an offer most potential buyers opt for between 10% to 15% below the asking price. It is worth also noting that when pricing their property, the owner will have probably added 10% or more on the expectation that people will want to make a cheaper offer.
When making their offers buyers should always back it up with an explanation as to why this figure is offered.
If the owner does not accept the first offer put to them, buyers should not worry as they can increase the original offer. There is no limit to the number of times offers can be made on a property.
If and when the offer on the property has been accepted it will be formalised in writing by the estate agent.
This document will have key items covered in it such as:
– the agreed purchase price
– any fixtures or fittings that are agreed as part of the sale
– any work that needs to be undertaken prior to completion of the sale
This offer should be ‘subject to survey and contract’, meaning the buyer is not legally committed to the purchase until a survey has been carried out and the contracts have been signed.
At this stage buyers should also ensure that the property is taken off the market, preventing the vendor from accepting a higher offer from someone else (known as gazumping).
Story link - Buying a House Part 2
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