The initial ‘making an offer’ stage during the conveyancing process is crucial and you, as the Buyer, must get it right!
Where an estate agent is involved, it is usually the case that they will have conducted a valuation of the property. They will then base the marketing price on their valuation figure. In many cases, the asking price ends up being more than the price the parties actually settle on and this should be borne in mind.
Offers on properties can usually be negotiated with the Seller. In most cases estate agents are involved so you will be able to use them as the middle man through whom to negotiate. Once an offer is made on the property it will be taken off the market. You are not legally committed to buying the property just because you have made an offer since you will not have entered into a contract at this stage. This means that either party can withdraw at any stage before contracts are exchanged.
It is becoming increasingly common these days for a Buyer and Seller to enter into a ‘lockout agreement’ once an offer is made. The agreement is prepared by the estate agents or Seller’s Conveyancing solicitor requiring a deposit (usually of a few thousand pounds) to be paid by the Buyer. If contracts are not exchanged within a certain period, the deposit paid by the Buyer will be refunded. However, if the Buyer withdraws during the term of the lockout agreement then they will forfeit the deposit. The terms of lockout agreements can vary but these are the usual terms.
The lockout deposit is not the same as the deposit paid when you exchange contracts. If the purchase goes ahead, the deposit paid under the lockout agreement will be deducted from the balance due to complete the purchase.
It is very important that your conveyancer reviews the terms of the lockout agreement, if there is one, to ensure it is not overly onerous on the part of the Buyer.