How to decide what offer to make on a property
Posted on Friday, November 6, 2020
You’ve found your dream home, but how much should you pay for it? Deciding what offer to make on a property can be tricky.
If you pitch your offer too low, you may miss out on the property. But if you make it too high, you could be left wondering if you got the best deal possible.
We look at the different factors to weigh up when calculating your offer - and how our tools can help you.
1. How long has the property been on the market?
Finding out how long a home has been on the market is a key factor to bear in mind when calculating your offer.
If a property has only just been put up for sale, the owners will be unlikely to accept an offer significantly below their asking price.
By contrast, if it was first listed several months ago but has still not sold, it may have been priced too high. The owners may be more likely to consider accepting an offer under the asking price as a result.
The good news is you can tell exactly how long a home has been on the market using our website. Simply scroll down the listing for the property you are interested in, and towards the bottom of the page you will find the date on which it was first listed.
Our website also shows you if the asking price has been reduced since it was first put on the market.
2. How much interest has there been in it?
Gauging how much interest there has been from potential buyers is another good way of assessing how open sellers will be to an offer.
Sellers are more likely to hold out for the full asking price if there have been a lot of viewings, rather than if it has been sparsely viewed.
While you can ask the sellers or their estate agent how much interest there has been, it’s good to do your own homework to double check.
Look at the number of views the property has received on our website. The listing page will include the number of views since it was first listed and in the last 30 days, giving you a sense of whether interest has tailed off or if other buyers keep looking at it.
3. What’s going on in the housing market?
Housing markets are typically either buyers’ markets or sellers’ markets.
A buyers’ market is characterised by supply exceeding demand, meaning those purchasing a property generally have the upper hand. In such cases, you are more likely to have a low offer accepted.
By contrast, in a sellers’ market, there are more buyers than there are properties available, increasing competition for homes.
If the market is very hot, sellers may receive several offers for their property and they are unlikely to accept one that is significantly below their asking price.
If you are not sure what type of market it is, take a look at our monthly Zoopla House Price Index which details the dynamics currently at play in 20 major cities.
With a few months left until the Chancellor's stamp duty holiday ends in March 2021, you may want to place an offer that the seller will readily accept so that you can kickstart the conveyancing process.
4. What’s going on locally?
It is also important to pay attention to what is happening to house prices in the area you wish to buy.
If property values are currently enjoying strong increases, sellers are likely to be happy to sit tight if they don’t get an offer close to their asking price in the belief that their home is rising in value.
If house prices are stagnant, or even falling, they are much more likely to accept an offer. It’s also worth researching any major local building developments, major road or transport plans that might impinge on the location in the short term.
Again, we have a great tool to help you find out what is happening locally. If you find the ‘Market stats’ tab under the images on the property listing, you can see how much average prices have risen or fallen in that postcode in the past 12 months.
It will show you how many homes have sold too, giving you a sense of how active the market is.
You can also see more local information on Zoopla's UK area stats page.
5. What do similar properties go for?
The best way to judge a fair price for a property is to see how much similar properties in the same area have recently sold for or are currently listed for.
Our website contains all of this information on the property’s listing page as well as on our sold prices tab.
If the asking price is significantly above these prices, it gives you a good idea of what your offer should be.
6. How much did the current owner pay?
Another indication of the offer a seller may be willing to accept is to look at how much they paid for the property themselves.
The ‘Price History’ section on the property’s listing on our website includes Land Registry data on when the property last changed hands and how much it sold for.
There are no hard and fast rules here, but generally speaking if someone has only owned a property for two or three years and the asking price is only slightly higher than the price they paid, they may be less likely to accept a lower offer than someone who has lived there for more than a decade, during which time the value of the home has doubled.
7. Why is the property being sold?
Finding out why the property is being sold can give you a valuable insight into how likely the owners might be to accept an offer.
Talk to the people selling or ask the estate agent. If they have already put in an offer on another property themselves, they are more likely to be in a hurry to sell.
By contrast, if they have listed their home to test the water but don’t yet have another property lined up, chances are they will be happy to hold out for a higher offer.
Other factors that may mean people are in a hurry to sell include needing to relocate for a new job, a loss of income, getting divorced or having children/outgrowing their current home.
8. Is anything driving the price higher?
A final thing to pay attention to is whether any other factors may be driving an asking price higher.
For example, is the property in the catchment area for a particularly sought-after school or is it within walking distance of a railway station to a major city.
If you click on the ‘Map & Nearby’ tab in the listing, you can see whether there are any schools, railway stations or other notable amenities in the vicinity.