There are a lot of firsts associated with being a first-time buyer. The first viewing you go to, your first experience navigating the ins and outs of the mortgage process, the first time you feel that wave of excitement when you find just what you were looking for in a property.
Another first is that all-important initial bid you make on the house of your dreams. Do you start small and gradually increase your offer, in the hopes of bagging the best deal possible? Or do you go in all guns blazing, as you attempt to wow the seller into accepting your initial bid?
The combination of huge demand and low supply in the current market has made the bidding process even more complex for first-time buyers. Bidding is a strategic game at the best of times and at present, players are in abundance, so it’s important to know what to expect and act accordingly if you’re going to emerge a winner.
To help you prepare, here are the top bidding strategies to keep in mind when it comes to securing your ideal first home.
Be ready for action
Ensure you’re ready to act when you find a property you love by obtaining mortgage approval in principle in advance of your search. Let the estate agent know that you are in a position to move as fast as possible should your offer be accepted and have your deposit ready for when that moment arrives. Inform them of your first-time buyer status, which is often attractive for sellers looking to avoid entering into a lengthy process with a bidder who may have capital tied up in other properties.
Once you’ve placed your initial bid, request access for a surveyor to examine the property. This will not only show your intention is genuine, but it could speed up the process down the line should your offer be accepted. Hiring the services of a solicitor at an early stage will also keep the momentum going once the sale has been agreed, ensuring little time lapses between this point and the exchange of contracts and other vital legal documentation.
Don’t be hasty when it comes to bidding
If you’re blown away by a property on the first view, it can be difficult to mask your excitement in the presence of the estate agent, but it’s important not to give too much away. You should never make a bid during a viewing; it’s a huge decision that requires time and consideration.
An estate agent is out to get the best possible price for the property they are selling – a fact that has been harshly hammered home in many instances over the course of the pandemic, with some agents offering exclusive viewings that give select buyers an unfair advantage over competitors.
So, once you’ve seen the property, go home, crunch the numbers and weigh up the pros and cons before placing an offer that you feel is worthy of the property and in line with your budget.
Quiz the estate agent
While it’s advisable to keep your cards close to your chest with an estate agent, it’s also important to build a rapport with them so you feel confident asking some crucial questions. This rings true more than ever in our current climate, with many first-time buyers revealing that it can now take multiple emails and calls to estate agents’ offices in order to get a response on basic information.
With countless buyers on the horizon and not nearly enough properties to match this demand, it’s an estate agent’s world – and those wishing to hop on the property ladder should be armed with the tactics needed to navigate it successfully.
When you do get the undivided attention of an estate agent, do some digging to find out important facts, like how long the house has been on the market, whether or not the owners are looking for a quick sale, why they are selling up, or whether it is an owner-occupied or rental property.
All this information will help you to figure out what your opening offer should be, as well as managing your expectations regarding how long the process should take if you are ultimately the winning bidder.
Do your homework on the property
The estate agent can be an important source of information, but you can also fill in the blanks with some research of your own.
Viewing the property price register will give you an indication of how many houses in your desired area have been selling for, which will influence the offer you decide to make.
If the property is located in a highly sought-after locale, this will also dictate your first move, because in this instance it would be advisable to enter the bidding process with a strong offer that is likely to be taken seriously.
On the contrary, if the property has been on the market for an extended period with little to no previous offers, this would indicate that you could begin with a bid lower than the asking price and still be in with a good shot at success.
Stick to your budget
A bidding war can be an emotional experience, but it’s important not to lose sight of your maximum budget. Know what you can afford and stick to it, or you could end up in a financially precarious position down the line.
Monitoring counter bids regularly will help you to stay on course. If you see that bids are going through the roof, you’ll likely have to bow out. However, if competing bidders are increasing in small increments, this may inspire you to hit your limit with a final, substantial bid that may make a seller sit up and pay attention.
If your final offer is successful, avoid losing out to last-minute bidders with a higher budget by asking the estate agent to remove the property from the market once it has reached ‘sale agreed’ status. They may not oblige, but if they do, you could be placing your foot on that property ladder and opening the door to your very first home.
Symmetry Financial Management specialises in helping first-time buyers source the best mortgage, specific to their requirements. Guiding you through the mortgage application process from start to finish, the team will assess the wide range of lenders in the market, and provide you with a number of choices while recommending the mortgage term, rate and lender that is most suitable for you and your goals. Get in touch today to book a no-obligation consultation.