The different types of house buyers, and how to deal with their offers?

The different types of house buyers, and how to deal with their offers?

June, 2022

As a house seller, the most important objective before you is to get the best price from the buyer. For this to happen, you need to understand the different types of buyers better, how to handle an offer and what to be mindful of.

There are three different types of home buyers

First-time buyers

First-time buyers are people who are usually currently renting out a place or living in their parents' home. Many property managers consider them the best type of buyer to attract because they are chain-free. This means that selling your home to a first-time buyer is usually hassle-free and much quicker. The estate agent needs to do the necessary checks of the buyer's identity and the situation to assess their financial stability.

If they manage to secure a mortgage agreement in principle, they can proceed with the process quickly. A buyer in rented accommodation should be able to move the buying process quickly, but their situation should be checked. A fixed-term tenancy could be an issue, especially if they still have a few more months ahead.

Buyers in a chain

Whether the buyer is in a chain is a significant factor to consider. This means someone who needs to sell their property before buying yours. It could be a chain of one – their buyer, or a chain of more people. The longer count of people in the chain, the greater the chance of delays and the sale falling through entirely.

The people part of a chain with solid selling positions can reduce the risk a little. For example, if they have instructed solicitors and have the necessary contracts and mortgages, the risk of working with them will be lower. It is essential to have your estate agent do a little research on those parts of a chain before you accept an offer.

Buyers offering cash

Perhaps the most attractive buyer is the one offering money. While, in most cases, this means accepting a lower offer, the upside is greater security and speed of the process.

The estate agent can get a confirmation of the buyer's situation through a professional acting party of theirs, like an accountant, bank or solicitor.

At what point does an offer become binding?

It is possible to pull out of the process before contracts are exchanged between you as a seller and the buyer. That is after all the surveys have been conducted, the negotiations and the legal fees.

You have to consider things like instructing the right solicitor on the case and responding promptly to requests for additional information from them. You have to communicate with all key parties every step to ensure that it goes smoothly.

Beware the risk of gazundering.

Gazundering is a practice in which a buyer reduces their offer right at the last minute, just before the contracts exchange step. As a seller, you are usually not keen on lower offers and could refuse them. This puts you back at square one, as the entire chain falls apart.

It could even lead to you accepting the lower offer just to conclude the deal. The only way to reduce the risk of that happening is to quickly monitor the transaction and respond to any query. The sale should not stall at any moment because otherwise, there is a risk it will fall apart.

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