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Three property sale rules

When putting together a purchase offer, it is first important to understand the rules of property sale:

• Homes will always sell at market value. Market value is determined by what a buyer is willing to pay.
• Market value is not a fixed, rigid price, but instead is a range of value. This is because no two buyers are alike. While one must have a pool, another will consider a pool a liability.
• You, the buyer, are the market.

As most regions continue to experience falling house prices, we see the deliberately low offer becoming normal practice.

The two buyer 'types'

In the current housing market, there are two distinct categories of buyers. One includes the traditional buyer looking for a good home at a good "value" today, because today is when they are looking. The second category of buyer is a little less concerned with timing or even suitability of the property and much more concerned with value, not only in the context of current value but in terms of anticipated value tomorrow or next year.

Regardless of the category in which you fall, keep in mind that both types of buyer are in the market at any given time. Unless your goal is to accumulate a scrapbook of rejected offers you will one day share with your grandchildren, it is critical to remember that you are offering to purchase a home. A home, unlike a pint of milk, or an office building, is inherently emotional.

Essential do's and don'ts of making an offer

• Don't offend. Unless you are offering on a property which has been held purely for investment, the seller is emotionally invested in his property. Criticising the sellers home is not a good strategy. Statements like "This offer reflects the fact that the premises will require professional cleaning with a blow torch prior to moving in" may just get you and your offer rejected.
• Do get personal. Write a cover letter summarising why you believe this is the right home for you. On many occasions, sellers have accepted a lower offer because they felt a connection with the buyer. For example, if the seller has a dog it wouldn’t hurt to mention that your own pet will absolutely love the new, huge garden.
• Don't defend your offer the wrong way. As in, by saying it is all you can afford or that you are basing it on what you believe values will be a few months. This approach will likely leave the seller with the notion that there is a buyer out there, one who isn't you, who can afford his home and at the price it is worth now.
• Do know the seller's circumstances. Does the seller want to move or does he need to move? Circumstances will dictate whether there is a bargain on the horizon, and knowing this in advance can save everyone aggravation.
• Don't preach. If you’ve found some information on comparable property sales, don’t beat the seller over the head with your spreadsheet. He has set a price, presumably after having taken this same data under consideration. You may believe his price to be high, but it is his price. Insulting his intelligence (even if you believe this intelligence, based on the price he is asking, is of the artificial variety) will not further your cause.
• Do be prepared to negotiate. No buyer wants to think they paid too much, and no seller wants to think he sold out. Expect to go back and forth a bit. "Take it or leave it" offers are rarely met with smiles from the seller, regardless of the price and even in this market. In negotiations, everyone wants to feel like they were in control and that they prevailed.
• Don't be unreasonable. There is value, and then there is being insulting. If a home is offered for X, and you are willing to pay 10% less than X, do not offer X minus £100,000 and then ask the seller to throw in his bedroom furniture and surround sound kit. You will not be taken seriously.

Today's property market is teeming with opportunities for the buyer. Great values, values relative to prices a year or two or more ago, are plentiful. But, insanely great deals are still needles in the proverbial haystack, because market value will always be determined by what a buyer is willing to pay. This buyer might be you, but if you are unrealistic or even simply careless with making your offer, it will probably be someone else.