What Makes a Good Offer and How Should I Know Whether to Accept It or Not?
Sellers often ask our Property Negotiators what they would consider to be a good offer for their property, and whether they should accept it. So, how do you answer this question?
To answer this question we need to consider a number of things – the state of the market, and the price that other similar properties are going for can give an indication, but we also need to look at the unique situation of you, the seller, and the circumstances of the sale.
If your home is on the market at a ‘fixed price’, then of course the answer is easy – if someone is willing to pay that price, then job done! However when a home is on the market at an ‘offers over’ or ‘offers around’ price, then the situation becomes a little more fluid.
How Much Can You Expect to Get for Your Property in Today’s Market?
In general terms, the property market in Edinburgh and the Lothians is on the up, with the latest reports from the ESPC showing that property prices are rising, more properties are going on the market, more properties are selling year-on-year and properties are now selling more quickly too. All of this is very positive for sellers.
The picture for selling price in relation to home report valuation is also improving, with roughly two-thirds of homes sold between June and August achieving a selling price equal to or in excess of their Home Report valuation according to figures from the Edinburgh Solicitors Property Centre (ESPC). What this does mean, of course, is that one third of properties are still selling at a price which is below the home report value. What we can take from this is that the property market has returned to a healthy place, but it is still important for sellers to be realistic about the price their property could fetch.
When you approach us to put your property on the market, we will give you a valuation of your property. To do this we look at comparable sales of properties in your area, use our expertise of the local market and demand levels, and provide you with an accurate estimate of what we would expect your property to sell for. It’s not the same as a survey, and could perhaps better be described as a ‘market appraisal’. Your pricing strategy (fixed price, offers over, or offers around) will be decided based on your circumstances, and what the property could hope to achieve.
The survey you receive as part of your Home Report will also give a good indication of what your property is considered to be worth. The survey element covers the structural elements of the property, and rates various elements of the structure of the house on a scale from 1 to 3, with 1 being the best and 3 being the worst. It also provides a surveyor’s valuation of the property.
So What Constitutes a ‘Good’ Offer?
Having had a valuation and a survey, you will have a pretty good idea of any work that may need to be done to your property, and what it could fetch. The answer to ‘What constitutes a good offer?’ however, will be dependent on your specific circumstances.
For example, if you are a family of four who are desperate to move to have more space for the kids, and timing is important to get them enrolled into the local school in the area you wish to move to, then you may want to move as quickly as possible. You may then set the bar at accepting the first offer that comes in that is equal to the home report value. This would make the first offer a good offer for you. However if your family can only afford to move if your property sells for 10% over the home report value, then a good offer for you must meet this minimum requirement.
So a good offer is dependent on your circumstances and what you consider to be the best result, which is usually a balance of cost and timescale.
Equally, the price that you can expect to achieve will also be determined to some extent by the buyer’s circumstances. A cash buyer who has their heart set on a home in your area may be willing to offer more to secure the home of their dreams, or, if your home appeals to first-time buyers, their mortgage size will be determined by the home report value, they may have limited funds for a deposit, and won’t, therefore, be able to offer more.
Of course, our team can advise you on what level of offer you can typically expect for a property of your size in your area. This may provide a benchmark for whether you could expect a better offer if you hold off, or if it is realistically a great offer based on what your property could hope to achieve. We will advise you on market conditions, current sale levels, and current sale prices, and are always at the end of the phone to answer your questions, but at the end of the day, it will be up to you, the owner, to decide if an offer is acceptable to you, and whether or not it gives you the freedom to meet the goals that you set for yourself at the start of the house-selling process.