Offers and negotiation

Making an offer

If an estate agent is marketing the property on behalf of the seller, you must make your offer through the agent. You will tell the estate agent the price you are willing to pay, along with your “buying position”, i.e. whether you need to sell another property to buy this one. Further negotiations are also conducted via the agent.

In short, yes. By law, estate agents have to pass on every reasonable offer they receive to the seller. The only exception would be if they know in advance that your offer is outside of the seller’s acceptable range, and therefore will be rejected anyway.

If you make your offer “subject to contract”, you can renegotiate it at any point until exchange of contracts.

Yes, they can. The agreement to sell a property only becomes legally binding at exchange of contracts, which usually happens several weeks after the offer has been accepted. To reduce the risk of someone else making an offer, you can ask the seller to take their property off the market once they have accepted your offer.

Gazumping

Gazumping is when someone else makes a higher offer on a property after an offer has been accepted, forcing the original proposer to either increase their offer or pull out of the sale.

To avoid gazumping, buyer and seller can enter into a lock-out agreement, which is a contract giving the buyer an exclusive right to purchase the property within a specified timeframe. The seller would then have to pay a penalty if they pulled out of the sale.

Buyers can purchase home buyers’ protection insurance, which allows you to claim back money you have spent on conveyancing fees, survey fees and other costs in the event of being gazumped and losing the property you are purchasing.

Gazundering

Gazundering is when a buyer lowers their offer at the last moment before contracts are exchanged, hoping to force the seller to accept the lower price.

Buying position

When a home buyer must sell another property to finance the purchase, usually because they are moving house, the two property transactions become linked into a chain. If any one of the linked transactions is delayed or falls through, the entire chain is delayed or collapses.

A cash buyer is someone who can buy a property solely with cash, i.e. without any kind of mortgage or loan, and without depending on the funds from the sale of another property.

A chain-free buyer is someone who can buy a property without needing to sell another property to finance it. All first-time buyers are also chain-free buyers, because they don’t have another home to sell.

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