Talk to me about buying a house in Scotland, offers etc.

[KKKKaty]

We've sold our house in England (subject to contract) and are currently house hunting in Scotland. I know the system in Scotland is different - an offer is binding etc. I also know that they often have an "offers over" system where there is a closing date etc. and people bid over the price.

However the area of Scotland we are moving to has a pretty stagnant housing market at the moment, especially at the more expensive end of the market (which we are going for). Some of the houses we are looking at have been on the market for months, over a year in some cases. The prices are advertised as "offers in region of" or "guide price".

Is anyone in the same boat? Has anyone recently bought in Scotland? Do you think it likely that they won't go for the sealed bid/closing date system with the houses we are looking at and will instead accept an offer under the asking price, like might happen in England? Do you think it possible that even if a house is advertised with a fixed price that they might still accept a lower offer?

Any advice greatly appreciated.

I would say yes, you have a good chance of making an offer even under a fixed price. Things have definitely changed.

Hi,

We live in Scotland and are currently selling our house...but that's a different story!

I can however offer you some information about the buying process from our perspective.

Vendors will have had a home survey done for you. You can request this from the Estate Agent and they have to give it to you within 9 days I think. Some websites send it to you automatically. This will include a valuation. Here is how I interpret the different ways you will see a house advertised:

Offers over - Hoping for several offers. In this instance you could make a note of interest and then the vendor will wait until he/she has more than one and will call a closing date and there will be sealed bids with the highest winning and no opportunity to re-bid. There is nothing to stop you making an offer on a house that is advertised as offers over. The vendors may just accept it and that's that. It's only when there is sufficient interest that they would go to sealed bids.

Fixed price - first past the post. Whoever offers the fixed price first, gets the house. Doesn't mean you should offer the fixed price though. You can offer whatever you like but it won't go to closed bids.

Offers around - bit wishy washy but I would say same as fixed price but if there is a lot of interest they may reject low offers and wait for more and go to a sealed bid. It also may suggest they are open to negotiation.

I think it's becoming much more rare that a house goes to a closing date with sealed bids. In some areas I am sure they do. In Edinburgh, in areas in good school catchment for example they can go to a closing date for sealed bids within days of coming on the market. Others stick for months and months.

Feel free to come back with any questions.

Thanks Bananas.

JoJo, thanks for this. I do have a couple more questions. You say the vendors will have had a survey - will this be a full structural survey, or does it depend? I was under the impression that the problem with the Scottish system is, that because offers are binding, that you have to have a survey done before making an offer, and can therefore often end up spending hundreds of pounds on a survey (or more than one!) on houses you don't end up buying!

Is it the case that there is an "informal" pre-offer e.g. "if we were to offer £x would you take it?" in which case you then do the survey, and if it's OK you then make the formal offer?

It used to be case that you could make an offer "pending survey", not sure that is still the casebetter check. Try not to get stung by multiple surveys we did! It is a real rip-off.

The survey is what's called the home report. It's not a full structural survey but it is informative. It will have the survey which will rate lots of different categories with either 1, 2 or 3. If it's a 1, then it's fine, 2 would indicate nothing urgent but might be worth further investigation and 3 would mean requires urgent work.

Re making an offer, you would make a verbal offer stating the amount you are offering. If this is then verbally accepted you would have your solicitor make it officially in writing to the vendor's solicitor. In this offer you can have conditions...so it could be that the condition is subject to structural survey or that the home report needs to be refreshed if it's old or anything you like really.

So you would firstly say to Estate Agent "would your clients accept £XXX" and then would then accept the offer on their clients behalf. You then know that the amount of money is acceptable and you would work out your formal offer with your solicitor.

The Home Report is normally fine for most properties but depending on the age or cost of the property you would decide whether to do a more extensive survey or you may wish to consult with experts if the home survey has shown evidence of damp or anything.

The Home Report is really good as it lets you know the state of the property before you go and look around and fall in love with a problem property!!

Hope this helps. Where in Scotland roughly are you looking?

I am a Scottish Estate Agent.

All properties by law must have a home report. The home report contains a survey. This survey is what your lender will use for mortgage purposes.

The offers over system isn't as it used to be pre home reports. Property is still advertised at OO but that is an initial advertising price bracket where sellers want to achieve the home report valuation price. I tend to use Offers Around instead though.

Closing dates/sealed bids are also pretty rare these days but still can happen. I have had 2 in 12 months.

Making a verbal offer is NOT legally binding. Your contract to purchase does NOT become legally binding until missives are concluded by your Solicitor and this can take 4-6 weeks. We tend to frown upon people being hasty with their offer and withdrawing just because they find something else they like etc.

You can make a verbal offer to the selling EA if you wish. Most accept this. Some are difficult and want a written offer from a Solicitor upfront but no harm in approaching them with your verbal.

Where are you interested in? PM me if you need help or are not sure what to do and I will give you a hand.

Thanks JoJo and Greggs. We're looking in Elgin. That's useful info re the offer not being legally binding until missives are completed. I will ask the agents about home reports.

I will definitely come back to you if I need further advice, but this has been helpful, thanks.

I like Elgin. Some bargains to be had. Lossie is nicer if you want to be closer to the sea.

Bargains, really? Sounds good. It has to be Elgin because of DH's work.

As the market is fairly stagnant across the country and you are in quite a strong position (once contracts exchanged) there are bargains to be had. If a property has been on the market for a long time then the seller may be in a position to negotiate. In Scotland many properties are sold by solicitors and not just estate agents. Make sure you get a local solicitor who can do the negotiations for you. It is unlikely that your English solicitor can deal with a Scottish purchase.

We re in Elgin, we bought at a fixed price 4 years ago the same house as mine has been on the market for £10,000 less for 3 months!!! Things have changed up here so yes you are in a strong position.

You are in a very strong position; very little in the north of scotland sells over the asking the price, and most of it under (from what I see and hear). Most dramatic example I've seen was a house that went on at OO £145k nearly 2 years ago; dropped to £138 fixed; went to around £110 a few months ago and actually sold at £106

There is so much choice up here that any property that has a major (or even minor) drawback has trouble selling. My best advice would be to only buy what you love & remember that offers over doesn't mean anything up here

This is all very encouraging. Nothing lost by putting in a silly offer.