What Is a Cheeky Offer on the House?

Risks and Rewards

Cheeky Offers

A cheeky offer is a lower-than-asking bid on a house, often made in a buyer’s market to secure a property at a better deal. Understanding the concept of a cheeky offer is important for anyone looking to buy a property in the UK, as it can be an effective strategy but also carries potential risks.

In the competitive UK property market, buyers often wonder if making a cheeky offer could help them secure their dream home without overstretching their budget. While cheeky offers can indeed result in substantial savings, understanding local market trends is important,  as they must be approached with caution and respect for the seller’s circumstances and the current state of the market.

Definition and Context

A cheeky offer typically falls between 10 and 20 per cent below the asking price, although this can vary depending on the local market and the seller’s level of motivation. For instance, on a property listed at £300,000, a cheeky offer might be around £270,000, depending on the home’s condition and market trends.

It’s worth noting that a cheeky offer differs from a lowball offer, which is usually seen as far too low and can offend the seller. Lowball offers often come across as unrealistic and may even halt negotiations altogether. A well-considered cheeky offer, however, is usually grounded in market data and the property’s true value, which is essential in the selling process.

In a buyer’s market, where there are more properties than buyers, a cheeky offer can be a powerful negotiating tool for a quick sale. But even in a seller’s market, where demand is high, a motivated seller might still entertain a cheeky offer, especially if the property has been on the market for a while.

The Role of Estate Agents

Estate agents play a significant role in the negotiation process, acting as intermediaries between buyers and sellers. A knowledgeable estate agent can offer valuable advice on whether a cheeky offer might be appropriate for a serious buyer and how best to present it.

Legally, estate agents must pass all offers to the seller, including cheeky offers, and ensure they are legally binding. However, they may also advise sellers on how to respond, highlighting any risks or opportunities. Buyers should work closely with their estate agent to ensure that their offer is presented in the best possible light.

Negotiation Strategies

Negotiation is at the heart of making a cheeky offer. Buyers should prepare by researching the local property market and gathering evidence to support their bid, such as recent sales of similar homes.

Effective negotiation also means communicating clearly and professionally with the seller, showing an understanding of their position. It’s important to listen to the seller’s concerns and be ready to adjust your offer if needed.

A carefully planned negotiation strategy can help you avoid common pitfalls, such as overpaying or losing the deal altogether.

First-Time Buyers

FTBs may find the process of making a cheeky offer particularly daunting. They need to work closely with an experienced estate agent and seek advice from a mortgage broker or lender to understand what is realistic and achievable.

They should also be prepared to negotiate effectively and remain flexible throughout the process. With the right guidance, first-time buyers can confidently make cheeky offers and, potentially, secure their dream home at a favourable price.

Mortgage and Finance

Before making a cheeky offer, buyers should ensure they have a mortgage agreement in principle in place to avoid issues with the property chain . This demonstrates to the seller that they are serious and financially capable.

It’s also important to factor in additional costs, such as conveyancing fees, stamp duty, surveys, and any potential renovation costs. A mortgage broker can help buyers navigate the market and find the best mortgage product for their circumstances.

Understanding the financial commitments involved helps ensure that a cheeky offer is not only feasible but also sustainable in the long term.

The Impact of House Price

House price is a key consideration when making a cheeky offer. Buyers should research recent sale prices for comparable properties in the area and consider how long the property has been on the market.

If a property has been listed for several months, the seller might be more willing to accept a lower offer. However, in a hot market, the seller may reject cheeky offers outright, knowing they could get a higher price from another buyer.

Being realistic about house prices and the seller’s expectations is essential for a successful cheeky offer.

Making an Offer on a House

Making an offer on a house can feel overwhelming, particularly for those new to the market. Buyers should make sure they have done their research and understand the seller’s circumstances.

A cheeky offer can be a good strategy to open negotiations, but buyers should be prepared for the seller to reject it or come back with a counteroffer. Flexibility and a willingness to negotiate are key.

With the right approach, buyers can use a cheeky offer to secure a property at a fair price without alienating the seller.

Offer Accepted

If a seller accepts the cheeky offer, buyers should review the terms and conditions of the sale carefully. It’s also wise to consider the risks, such as the seller pulling out or other offers being made.

Buyers should work closely with their mortgage lender and conveyancer to ensure the sale proceeds smoothly. With the right support, buyers can successfully complete the purchase and move into their new home.

Research

Research is the backbone of a successful cheeky offer. Buyers should collect data on recent sales, market trends, and property conditions. This evidence helps build a strong case for their offer, especially when competing with other buyers .

With thorough research and the right professional advice, buyers can make informed decisions and negotiate effectively.

A cheeky offer can be a valuable tool for buyers in the UK housing market, but it must be used wisely. By understanding the risks and rewards, researching thoroughly, and working with experienced professionals, buyers can make offers that are both realistic and respectful, ultimately securing their ideal property without breaking the bank.