How do I choose the best offer when selling my home?
The highest offer might not always be the best offer. There are other factors to consider when choosing which buyer's offer to accept.
In this article:
Things to consider, other than the offer price
One in three property sales in England and Wales fall through after an accepted offer, often due to conveyancing delays. A longer post-offer process increases the risk of changing circumstances for any party in the property chain, which can jeopardise your sale.
If you have received multiple offers, choosing an offer from a buyer in the strongest position can expedite your sale. While the highest offer will seem most appealing, you may also want to consider the following:
A chain-free buyer eliminates the risk of delays from other transactions in the chain, making your sale less exposed to the changing circumstances of other buyers and sellers. While such buyers may make lower offers, knowing they're attractive to sellers, the speed and certainty they bring might outweigh the lower offer.
An offer from a cash buyer may be more attractive, as it eliminates the uncertainties associated with mortgage approvals, such as the lender:
- refusing to lend to the buyer or on the property
- down valuing the property
- withdrawing their offer if the buyer's financial circumstances change
Waiting for a formal mortgage offer can also slow the conveyancing process down - increasing the risk of problems due to delays.
Cash purchases can often complete more quickly, but only if there is no chain or the other parties in the chain are also cash buyers.
Buyers who need to sell
Most buyers are typically part of a property chain, needing to sell their own home to finance the purchase of yours. Aware that they're competing against chain-free buyers, they may offer more to make their offer more appealing. If you're in no rush to sell, negotiating with a buyer in a chain could help you achieve a higher price.
First-time buyers, often moving out of rented accommodation or family homes, will be chain-free. However, as they are typically new to the mortgage process, it's advisable to ask if they have a Decision in Principle (DIP) from their mortgage lender.
Talk to your estate agent
Once you receive an offer, ask your agent to confirm if the buyer is:
- a cash buyer
- in a chain and if so, how long is the chain
- has a buyer for their property
- in a hurry
- proposing anything else that will strengthen their offer
Armed with this information, you can negotiate with greater confidence. There's generally no rush to accept an offer immediately. If you have reservations, your agent can relay them to the buyer, who might then increase their offer.
Is it all about getting the highest price?
Both sellers and buyers have different motivations, timelines, and circumstances. If you're not pressed for time, you can wait for a higher offer. If you're part of a chain, urgency may dictate your choices. Similarly, buyers have their own set of constraints that can impact their offer. When considering offers, it's crucial to think about the buyer's situation, as well as your own needs.
Determine your priorities. Is a quick sale more important to you, or are you aiming for the highest possible sale price? Are you willing to accept the inherent risks of a property chain if it comes with a higher offer? Establishing your key objectives will help you to consider offers.
Be wary of gazundering, a tactic where a buyer lowers their offer shortly before exchange of contracts. Buyers in a chain might initially make an enticingly high offer to secure your patience while they find a buyer for their own property. Be wary if an offer seems too good to be true and ask your agent to verify the buyer's position as recommended above.
I need to sell quickly
If your priority is to achieve a quick sale, a lower offer from a chain free, cash buyer might be the best choice. Don't assume that the buyer also wants to complete as quickly as possible - ask your agent to confirm the buyer's desired timeline.
Another option might be to sell through a property auction, which guarantees a faster sale process, as the winning bidder is usually contractually obligated to complete the purchase within 28 days of the winning bid. You may not get a bid for the price you want, however, but you will be able to set a reserve price.
You could also try quick sale companies, which are businesses that specialises in purchasing properties quickly but, typically, for a lower price than might be achieved on the open market.
I have received an offer from a developer
If you've received a high offer from a property developer, it's worth considering their motivations for the purchase. Are they looking to renovate or extend the property, adding significant value? Could other developers also be interested?
Keep an eye on upcoming developments in your area that could make your property more valuable. If you're not in a rush to sell, talk to estate agents for their insights. An early, full-asking price offer could be a sign that local improvements are underway, potentially making it worth holding out for an even better offer.
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Gaynor Haliday, Legal researcher
About the author
Gaynor Haliday is an experienced legal researcher and published author. She has had numerous articles published in the press and is a legal industry commentator.