Why Sellers Ask for More

Sellers ask buyers to increase their offers for two main reasons: because they genuinely believe the property is worth more than the offer, or because they have received (or expect to receive) a higher offer from another buyer. Understanding which of these applies in your situation is key to deciding how to respond. In the first case, the question is whether the seller's valuation is realistic. In the second, the question is whether the competing interest is genuine and whether the property is worth more to you than your current offer.

Is the Competing Interest Genuine?

Estate agents sometimes use the suggestion of competing interest to encourage buyers to increase their offers, even when no competing offer exists. This is not illegal, but it is misleading. To assess whether competing interest is genuine, ask the agent directly: 'Is there another offer on the table?' Agents are not permitted to lie about the existence of other offers, though they are not required to disclose the amount. If the agent is evasive or vague, treat the claim of competing interest with scepticism.

Signals That You Should Increase

There are situations where increasing your offer is clearly the right decision:

• The property is genuinely well-priced relative to comparable sales and you have offered below market value
• There is credible evidence of a competing offer at or above your current offer
• The property is rare or in high demand and you are unlikely to find a comparable alternative
• The seller has given a clear indication of the price at which they would accept
• The gap between your offer and the seller's position is small relative to the value of the property

Signals That You Should Hold Firm

There are also situations where holding firm is the right strategy:

• Your offer is at or above market value based on comparable sales
• The property has been on the market for a long time without selling
• The seller has rejected multiple offers and appears to have unrealistic price expectations
• The competing interest appears to be manufactured rather than genuine
• Increasing your offer would take you above your maximum budget

How Much to Increase By

If you decide to increase your offer, do so in a considered way. Jumping immediately to your maximum leaves no room for further negotiation and signals that you are willing to pay more. Incremental increases — each one meaningful but not your final position — are generally more effective. However, if you are in a competitive situation and the property is one you genuinely want, a decisive increase that takes the property off the market may be preferable to a protracted back-and-forth that risks losing it to another buyer.

The Best and Final Offer Process

In competitive markets, sellers sometimes ask all interested buyers to submit their 'best and final' offer by a specified deadline. In this situation, you have one opportunity to make your strongest offer. Research comparable sales carefully, decide on the maximum you are willing to pay, and submit that figure. There is no point in holding back in a best-and-final process — if you lose the property by a small margin because you held back, you will regret it.

Know When to Walk Away

The most important discipline in any negotiation is knowing when to walk away. If the price has risen above what the property is worth to you — whether because of market evidence or simply because it exceeds your budget — be prepared to withdraw. Overpaying for a property is a decision that will affect your finances for years. No property is so unique that it is worth paying significantly above its market value.