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What to offer on a house

publication date: Jan 13, 2014

If you are in the process of buying a property, then in our experience, to make an offer is a pretty stressful time.

It needn’t be though. Making an offer on a house in this day and age is much easier than it was in the past as there is far more information available than ever before on the sold prices.

Follow my three steps so you can work out how much to offer on your next home.

Step one: find out what the seller paid for the property,
For anyone who bought a property since 2000, the price they paid will be on the internet. So find out when the buyers last bought. Even if they bought before 2000, there is data that can help you work out what they would have bought it for as far back as 1995.

So, put the postcode of the property you want to buy into one of the many ‘sold property price’ internet searches. My favourite is  The reason I like this site is you can also click on tabs like ‘area guide’ and ‘flips and flops’, which give you a good idea of what properties are available locally and what’s happened to property prices over time – not just recently.

When you put in the postcode of the property you want to buy, find the nearest similar property which last sold on the street. Hopefully there will be one which sold within the last six months.

But if the last one sold in say 2004 and it sold for £150,000, you can go to the Land Registry  and find out from 2004 to the latest date how much the ‘average’ house prices have risen by.

  • In your local authority, they might have been £200,000 in 2004
  • If they are now £250,000 

Prices have risen by £50,000/£200,000 = 20%.

Next, take the price of the property you want to buy which was:-

£150,000 in 2004, multiply it by the 20%

So on average your property should sell today for £150,000 x 20% = £180,000.

If the property is around this figure to buy, then it suggests property prices for the property you are looking to buy grow ‘on average’ with the local averages. If it’s below or above, you’ll need to find a similar property in a nearby postcode to have a look at to see what kind of value the property you want to buy has recently be sold for.

Step two: work out what you can afford to pay
Whatever the property is worth – and that’s really what the seller will sell it to you for and what you can afford.

So the important costs to be aware of when buying and owning a property include:-

  1. The deposit (anything from 5-50% of the property’s value)
  2. The mortgage and insurance costs
  3. Maintenance costs (average £500 to £1,000 a year depending on age)
  4. Service and major works costs if a flat or leasehold property (make sure you secure a good leasehold legal company from ALEP 
  5. Renovation and furnishings 

Your deposit monies need to be with your legal company at the time of exchange. Your mortgage rates will fluctuate over time. Since 2000, they have been as high as 7%, so even if you have secured a 3% mortgage rate now, you should make sure you can afford it at 7% too. In the 1990s they went as high as 15%! The BBC has a great mortgage calculator you can use.

Step three: don’t panic, offer a fair price you can afford
It’s terribly stressful making an offer to an agent. But once you know what is the most you can afford and a fair price to pay, then you are in a position to make an offer.

All you have to do then is be honest. I’ve bought properties because I’ve said, I know it’s worth £180,000 but I can only afford £170,000 (and that is true!), then I’ve pointed out I am a cash buyer (ie nothing to sell), I want the house, will wait for the seller to find another one, etc.

In other cases, I’ve said look, it’s up for £180,000 but I’ve looked at what other properties are selling for and they haven’t sold for any more than £165,000 so that’s what I’m going to offer.

Final tip: Once you’ve made your offer, you should have a carried out, so ensure your offer is made ‘subject to survey’

If you need help with any of the suggestions above or can’t work out how to do them, call us on
01652 641722, or contact us

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All our information is brought to you by Kate Faulkner, author of
Which? Property books and one of the UK's top property experts.
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