How do I make an offer on a property?

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 and whether you need to take a mortgage to finance the purchase. Further negotiations are also conducted via the agent.

Does an estate agent have to pass on my offer to the seller?

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.

Can someone else make an offer after my offer has been accepted?

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. You could also ask the seller to enter into a lock-out or reservation agreement, which is a contract giving the buyer an exclusive right to purchase the property within a specified timeframe.

Can I change my offer?

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

What does it mean to be in a chain?

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.

What is a chain-free buyer?

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. However, the buyer may still need a mortgage to finance their purchase.

What is a cash buyer?

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.

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.

Can I protect against being gazumped?

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.

Can I avoid being gazumped?

To avoid gazumping, buyer and seller can enter into a lock-out or reservation 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.

Yes: there is a strong argument that gazumping is unethical, but it is totally legal. A property sale only becomes legally binding at exchange of contracts, so it can be cancelled or renegotiated at any point before that.

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.

Is gazundering legal?

Yes: there is an argument that gazundering is unethical, but it is totally legal. If a buyer makes an offer subject to contract, the price can still be negotiated at any point until exchange of contracts. This is normally done to allow renegotiation if a survey finds a problem with the property, but it also enables gazundering.

What is a reservation agreement?

A Reservation Agreement is a legal agreement, implemented at the point an offer is agreed, that allows buyers and sellers to commit to each other and guarantee the sale. If either party pulls out of the transaction prior to exchange of contracts, they are required to pay a penalty to the other party, as per the terms of the agreement.

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Frequently asked questions about Making an offer on a property

How do I make an offer on a property?: 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 and whether you need to take a mortgage to finance the purchase. Further negotiations are also conducted via the agent.
Does an estate agent have to pass on my offer to the seller?: 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.
Can someone else make an offer after my offer has been accepted?: 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. You could also ask the seller to enter into a lock-out or reservation agreement, which is a contract giving the buyer an exclusive right to purchase the property within a specified timeframe.
Can I change my offer?: If you make your offer /subject to contract/, you can renegotiate it at any point until exchange of contracts.
What does it mean to be in a chain?: 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.
What is a chain-free buyer?: 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. However, the buyer may still need a mortgage to finance their purchase.
What is a cash buyer?: 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.
What is 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.
Can I protect against being gazumped?: 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.
Can I avoid being gazumped?: To avoid gazumping, buyer and seller can enter into a lock-out or reservation 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.
Is gazumping legal?: Yes: there is a strong argument that gazumping is unethical, but it is totally legal. A property sale only becomes legally binding at exchange of contracts, so it can be cancelled or renegotiated at any point before that.
What is 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.
Is gazundering legal?: Yes: there is an argument that gazundering is unethical, but it is totally legal. If a buyer makes an offer subject to contract, the price can still be negotiated at any point until exchange of contracts. This is normally done to allow renegotiation if a survey finds a problem with the property, but it also enables gazundering.
What is a reservation agreement?: A Reservation Agreement is a legal agreement, implemented at the point an offer is agreed, that allows buyers and sellers to commit to each other and guarantee the sale. If either party pulls out of the transaction prior to exchange of contracts, they are required to pay a penalty to the other party, as per the terms of the agreement.