When you find the house you want, it’s so exciting when you put your offer in. You’re one step closer to getting the keys to your dream house. But if your offer comes back rejected, the sinking feeling starts. It’s time to start thinking about making a second offer.
When making a second offer on a house there are so many things to think about. How much higher should I go? Am I in a good enough position? What is the competition doing? The list of questions is endless…
We’re here to answer all your questions and help making a second offer on a house that little bit easier.
If you want to find the answer to a specific question, use this menu to guide you:
- Can you put a second offer on a house?
- When should you make a second offer on a house?
- What to consider when making a second offer on a house
- Can you put an offer on a house that already has an accepted offer?
Can you put a second offer on a house?
Yes, there is no reason why you can’t put in a second offer on a house. If you’re making a second offer on a house because your first one was rejected, it’s important to find out why was your offer rejected so you can angle your next offer to appeal more to the seller.
For example, if your offer was too low, before making a second offer on a house, it’s a good idea to speak with the estate agent and get a better idea about what price the seller will accept.
If it’s a case of not being in a ‘strong’ enough position, this is a little trickier to change. If you have a buyer for your house, you could try push to exchange contracts to help you look a more guaranteed buyer, as the sale of your house is legally binding.
The second offer on a house gives an opportunity for both parties to ‘meet in the middle’ with a bit of negotiation, helping both parties to agree on a price they’re both happy to move forward with.
If your second offer is rejected, you can go in with a third offer, but we recommend making this your best and final offer. Make sure you make it known this is your best and final offer, so the seller knows to take it, or you’ll move on. If you keep giving further offers, the seller will keep turning them down, thinking you’ll go higher and higher, which could lead to you overpaying.
When should you make a second offer on a house?
If you’ve put an offer on a house and it’s been rejected, you may be thinking ‘how long after submitting an offer on a house can I make a second offer?’ which is a very good question, one we’re here to answer for you!
You can make a second offer on a house at any point after your first offer is rejected. There are no ‘rules’ around when you should and shouldn’t make a second offer on a house, so it’s down to what you think is right.
However, before making a second offer on a house we recommend waiting 12-24 hours after your first offer was rejected. This will act as time for you to reconsider and work out what you’re able to afford before submitting another offer. You don’t want to submit an offer too high too quickly as you may regret it later and overpay.
It will also show the seller that you’re not desperate to buy. This is good because if you look too keen the seller may use this as a way of getting more money out of you, because they know how much you want the house (annoying, we know).
Waiting before making a second offer on a house also allows the seller to think about what they consider a ‘good’ offer and work out what is the lowest offer they’ll accept.
But if you know a house is under high demand and there are other offers flying in, you may want to get a second offer in more quickly. You don’t want to lose your chance at your dream house!
What to consider when making a second offer on a house
As we said earlier, before making a second offer on a house it’s a good idea to take some time to have a think. We’ve made a list of things that are good to consider before you submit a second offer:
- Why was your offer rejected? Was it too low or was there another offer they wanted to accept? Were you not in a strong enough position? You need to figure out why you got were rejected and make sure when making a second offer on a house that your offer is more appealing to the seller.
- Can you afford more? If your offer was rejected because it wasn’t high enough it’s important to take time to consider whether you’re able to afford to offer more before rushing into placing a higher second offer on the table.
- What position are you in? If you’re competing with others in a stronger position than you, it may be really hard to put in a second offer that would appeal to the sellers, as if you don’t have an offer on your house or exchanged contracts, you’re in a weak position to offer on houses, unless of course you don’t need to sell your house and you’re a cash buyer.
- What’s the competition like? Is there any? If there’s competition, you may end up getting into a ‘bidding war’, meaning the price will get driven up. Bidding wars can often result in you paying too high a price for the property so make sure you know what the competition are like and, if there’s a potential for a bidding war, make sure you know your top price.
- Is it overpriced? If the house is overpriced, the estate agent has likely given the seller an unrealistic expectation about what they will get for the property. This makes it hard to offer on, so with your second offer you will need to make sure your offer is reasonable but not offensive to the price. Your second offer always gives room for negotiation.
- Will you be able to make the money back? It’s important you consider this as you don’t want to overpay for a house and then not make the money back when you come to sell it. When making a second offer on a house, there’s a good chance the buyer may accept it, so make sure you’re happy you’ll be able to make back the amount you’re putting forward.
- Does the location add a ‘premium’ to the price tag? If the property is in a sought-after area, then it’s likely the price tag will be a little higher than the same house in a different area. Location is something you can’t change with a house, so it may be worth making a second offer on a house that little bit higher.
- Is this going to be your final offer? Make sure you know what your final offer is and don’t go beyond it. It may be a case that your second offer is still below your final offer, but the seller doesn’t have to know that!
- Is there something you can use for negotiation? Does the house require work? Does it need a new roof, patio, kitchen etc? If it does, this is something you can use when making a second offer on a house as leverage for negotiation.
- How badly do you want this house? If it’s your dream house and you’re convinced this is the right house for you, you should maybe think about going a little higher with your second offer or letting the seller know why you’re a good buyer and why they should choose you.
- Is the property for you? If the property is for you, you will be more emotionally attached and so will be more likely to be more generous when making a second offer on a house. If the house is for someone else or for rental/investment purposes, you’re less emotionally involved and are less likely to be willing to put super high offers on the table.
- How long will you live at the property? If the property is going to be your ‘forever home’, it’s worth making your second offer that little bit more. However, if you’re buying the property for the short term, then naturally you will likely be less motivated to place a high second offer.
- Is there another house similar? If there’s another similar property on the market, then the buyer is in the stronger position. This one house is ‘just another house’ and you can use this in your negotiation when making a second offer on a house.
Can you put an offer on a house that already has an accepted offer?
In short, yes you can. There are no rules stopping anyone from putting an offer on a house that already has an offer accepted. If you place an offer on a property with an accepted offer and your offer gets accepted in place of the other, then this is known as ‘gazumping’.
If you’re seeing ‘gazumping’ and scratching your head thinking ‘what does that mean?!’ then don’t panic, we’ve got you covered. The definition of gazumping is when another party makes a higher offer on a property that already has an offer accepted and has their offer accepted, pushing the current buyer out of the sale and back to ‘square 1’.
Gazumping doesn’t necessarily mean the 2nd party put in a higher offer. It may be a case of their offer matched the current accepted one but instead they’re a cash buyer and so can move more quickly, making the seller feel more comfortable that they have a guaranteed buyer.
Morally, if you’re putting an offer on a house that already has an offer accepted, you want to make sure this is really something that you want to do. Not only are you stopping the process for someone else but also, if later down the line you see a different house you prefer and drop out of the sale, this is really frustrating for the other parties involved.
Can a seller accept another offer?
As we said earlier, yes, a seller is allowed to accept another offer on a house, and it is called gazumping. However, they can only do this before the sale becomes legally binding, which is after exchange of contracts takes place.
There are many reasons why a seller may accept another offer on their house, after having already accepted one. For example, they may feel their current buyer isn’t a trustworthy buyer or it may be a case of them wanting a fast sale and the second person to offer is a cash buyer and willing to move quick.
What happens when there are 2 offers on a house?
When there are two offers on a house, the buyers will have less control and less room for negotiation, as there are multiple people ‘competing’ for the keys to the same house.
If you’re a buyer, find out what it is that the seller is after – are they wanting a high price? Or are they wanting a sale that can move through quickly? Or maybe even both? Once you know what your seller’s main priority is, you can angle your bid to be more appealing to them. You can also state with your offer what makes you a good buyer and why they should choose you.
If you’re the seller then WOW, lucky you!
But on a more serious note, you have to look at all the offers on the table and decide on the one which is best for you. It’s so easy to be tempted by a higher offer but it’s not always the best decision. Look at all the strengths of the different buyers and see which matches to what you want.
Or you can ignore our advice and choose the highest offer! It’s really up to you!
With two offers on a house, it’s possible that a bidding war may happen. This is when there’s more than one person offering on a house and the two (or more) bidders keep placing offers to counteroffer the other available offers. As a result of a bidding war the price can get driven up and when an offer is finally accepted, the accepted offer may be higher than what the property is worth.
As a buyer it’s important to make sure you have your top price you’re willing and able to pay for a property and stick to this. Otherwise, in a bidding war, things may get out of control and you end up paying more than you wanted to.
What is considered a lowball offer on a house?
Lowball is a slang term for an offer significantly below the asking price of a house. Typically, these types of offers work best in a ‘buyer’s market’, as buyers will have more ability to negotiate.
Generally, you will find sellers are slightly reluctant to accepting a lowball offer because naturally we all want as much as we can get for our property. A lowball offer can be appealing though. If, for example, the house has been on the market a while or the seller needs to move urgently, a lowball offer from someone who can move quickly will look more appealing.
If you want to know more about lowball offers, have a read of this – you’ll get the full lowdown on cheeky offers on a house!
What do you think about making a second offer on a house? How long should you wait and how much should you increase your offer? Get in touch and let us know what you think!