Scottish buying/selling system(25 Posts)
Can anyone advise me in simple terms how it works please?
Elderly aunt downsizing and I see that similar properties are on the market at a fixed price but hers has gone on at what I consider a bargain price but with 'offers over'.
The agent has told her that it should fetch very much more (it's a lovely flat in a very desirable area with lots of original features) but I'm in England where an 'offers over' listing would suggest that the seller would take the asking price or very slightly above. What happens in Scotland? Thanks
Scotland normally list with offers over price that is under valuation. The seller provides the survey so you know the valuation before you put it on the market. Depending on local market conditions you may get more than valuation price.
Some people do fixed price but not that common. Normally if looking for a quick sale. If more than one interested party then a closing date will be set and sealed bids submitted.
The "offers over" amount varies massively by area too - as far as I can tell from people I know who are buying/selling at the moment, desirable properties in Edinburgh (period flats in Morningside/Marchmont/New Town, family houses in Orchard Brae/Craigleith, etc) seem to be getting 20%+ over their offers over. And that's when the offers over has been set pretty close to the home report value!
Other areas will be very different so it depends.
Where is it
That is the key
In popular areas property is going way over
Ask king price doesn't mean much it's the Home report value that counts
Fixed price property is quite rare in Scotland, particularly as an opening price
Can make purchasers think there is a problem or seller desperate to sell
Fixed price is often put on properties which have been on the market for a while. My estate agent brother defines it as "help us out here". In other words the seller may take a little less. As others have said "offers over" is the most common and depending on area and desirability properties may fetch considerably more.
Fixed price usually means "first come, first served" and "I want to sell very quickly" (the property might also have been on a market for a while and there have been no offers over an acceptable amount, or no offers at all). "Offers over" could mean... anything. You could offer less but chances are the seller will probably not accept it (although he/she might change his/her mind if no one offers more). But if there is more interest in the property things will go to sealed bids on a closing date and, if it's a very desirable location, the "over" could be 20-25-30% over. Or just a couple of thousand pounds. It's all about the location, I am afraid.
It is a period tenement flat with garden in Glasgow. Lovely area. Marble hallway. Original glass in the doors, original servants bells in the rooms etc.
Thanks for the info: certainly makes more sense if the fixed price ones have been on the market a while or are newbuild.
Which area of Glasgow? The West End & parts of Southside (around Shawlands/Strathbungo) go for considerably more than the home report value, usually at a closing date, competing blind against other bidders. Other areas are less in demand & perhaps there is scope for negotiation.
Offers need to be put in by a solicitor, and are legally binding at a much earlier stage than England. There's very little gazumping & pulling out, or being "in a chain".
Depends on the location and current market. When I was first looking things were being put on at offers over the valuation and going for 10-20% more. Nightmare for a first time buyer as you needed deposit plus anything over the valuation so another 10-20%. The market has totally crashed around us and things are now going for the offers price or less.
We've just sold in Scotland under offers over. We had quite a few viewers who said they'd lost out on houses at closing date recently, and we lost out on one too.
To give you an idea, we saw a house at offers over 235k, valued at 250k, we bid 295k and lost it.
Our house sold for 12.8% over the OO price, with 3 sealed bids. OO price was 15k less than the valuation.
This is in commuter belt basically - pretty close to Glasgow. It's more competitive the closer you are, obviously!
It sounds like the EAs expect this property to be very popular, especially if it's orginal features are present.
I think you'll be pleasantly surprised.
The offers over price is a bit irrelevant in Scotland these days. What’s important is the valuation in the home report. In desirable areas you would expect to get a bit over the home report.
In desirable areas a low offers over price is used to drum up lots of interest.
Thanks all. I think you are right and I'm worrying unnecessarily. The valuation is quite a bit higher than the offers over price, but it looks like she'll be fine as there has been a lot of interest already. It is West End, red stone, facing a bowling green rather than another tenement so really bright and light. It has modern but unfashionable bathroom and kitchen and lots of potential to put ones own stamp on it yet retain the original charm . If it wasn't 100s of miles away I'd live in it myself!
We were advised when selling a tenement in a good location to expect £10-25k over HR I expect this number goes up depending on size of flat etc... Offers over price is rarely anywhere near the final purchase price unless it's not in good condition which doesn't sound like is the case. Good luck to your aunt!
Sorry, me again with more questions. How long is usual for a property to be on the market after offers start coming in?
Do the agents just allow a couple of weeks or do they set a certain date or does it go on indefinitely?
I'm no expert but when we bought three years ago we found if the offers start coming in a date would be set within a week or two. We were buying in spring, when things tend to get moving.
Makes sense. Thanks. It's so different to England where each offer is accepted or not as it comes in. She went on the market last week and is hoping to 'close' before the end of next (which I presume means accept the best offer?
I don't know why I was ever worried about her...she's clearly got the whole thing sorted!
That's correct; usually if a buyer is interested in a property, they ask their solicitor to "note interest". Two notes of interest (or more) will lead to a closing date being set within 1-2 weeks. This is in high-demand areas.
In a slow market, a solicitor can make an offer but it won't necessarily go to a closing date. Sometimes buyers will try to make a good offer up get a property off the market; but most sellers want a closing date.
What is the difference between expressions of interest and sealed bids?
Can the agent tell other people about interest but once a sealed bid goes in it is considered secret?
My aunt said she has had X offers but I think she means expressions of interest not actual offers? Is that right? and then once she sets a closing date they all have to put offers in by that date?
An expression of interest is where your solicitor formally contacts the seller's solicitor to state that you are interested in making an offer & wish to be kept informed of progress via the seller's solicitors (ie when a closing date is set).
A potential buyer can make an offer at any time in the process, through a solicitor, but most sellers want to hold out for the "best offer" at closing date.
Unless someone makes them a huge offer that's worth losing out at a closing date.
We've recently bought our first property 20 minutes from Glasgow in a gorgeous little village and it's taken us months of losing out to closing dates as most properties will be put on for example of offers over £99,995 with the home report valuating it for £115.000 and these will usually go for £120,000 - £140,000 making it hard to know which kind of offer to put in! House prices in my area are rising and closing dates are becoming popular leaving most people putting in offers well over the value price in a manic bid to get a house they actually like!
So excited for her. She has had her offer accepted on the one she wants and has set closing day for Thursday this week on hers! The Scottish system is much more exciting than the English one! A real rollercoaster of emotion!
You were all right and I wo9rried over nothing. She closed on the Thursday and by 5pm had sold her flat for over 30% over the offers price to a cash buyer. She'll be relocated by the end of September! Much better system than in England where the searches etc drag on for months!
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