Scotland: offers 'over'!

[TakingtheLeap]

DH and I are hoping to put in an offer on a house in a few weeks' time. We live in Scotland and where we are buying almost all houses are put on the market as 'offers over'.

Most of the research I've done online suggests that houses are usually allocated an 'offers over' price that is somewhere below the Home Report valuation price in order to drum up interest. In the case of the houses we are looking at, this is not the case: the offers over price is exactly the same (or, in one case, £500 less) as the valuation price.

We are reluctant to pay over the valuation price, as we would rather put everything we can into the deposit / essential repairs. All of the houses we are looking at have been on the market for between 4 months to 18 months.

For those who know the Scottish housing market (particularly in rural areas), are we being utterly unrealistic going in with the expectation of not offering more than valuation price? Is this sort of thing - the offers over price matching the valuation - optimistic advertising on the part of the sellers / agents?

Would be very grateful for any thoughts / advice!

I wouldn't think your mortgage lender would allow you to offer more that the mortgage valuation in the home report.

I think lots go on at offers over this valuation, but I have no idea how anyone actually gets more because of the above.

Having had ours valued recently, and looking at what's available here in Angus, it seems to me that the Surveyors are being pressured into ascribing higher than necessary valuations by estate agents using overpricing as a sales tactic to get people to sign up with their firm.

For example,I've seen one go on recently at offers over 220k on a 230k valuation. The thing is though, the house needed £30k of modernisation. It's now on six weeks later at offers over 175k which is a bit more realistic but still a lot when you look at what and where it is. Interestingly, this was on with the same agent who valued ours at £20k more than we expected it to be worth and said he could push the surveyor to a higher valuation. Unsurprising, given that the Surveyors are appointed by the agents, not vendors, so even if they are supposed to be independently valuing a property, there has to be an element of keeping the agents sweet to keep business coming in. It's a scam, imho and is blocking up the market with overvalued property not shifting because vendors won't accept a reasonable offer.

I think it really depends on how much work needs to be done to a property, where it's located and how much other interest there is in it.

We're currently looking at something valued at 190k, being marketed for two years at 180k, but needing £15k spent to bring it back up to how we would want it to be. We think we'll start around 172 and hope to finish between 175 and 178, if it helps you.

I wouldn't think your mortgage lender would allow you to offer more that the mortgage valuation in the home report.

You can offer whatever you want over the Home Report. The mortgage company will not care although they will only lend up to the Home Report price so you have to make up any shortfall out of your own funds.

I buy and sell a lot of property. In many cases I have successfully managed to get properties for under Home Report price and in some cases I have had to pay more.

If a property has been on the market for 18 months I would expect to pay a maximum of Home Report price and possibly less. It really depends on the sellers motivation for moving. If they want to offer on another property they may consider home report or less.

There's not a lot of houses on the market at the moment (Winter).
If it's priced right it will sell. Saw one the other day at a fair fixed price of £249,999 and it sold in a week.
If you like it, put in a Note of Interest. That means they can't sell it without letting you know another offer has been received. They'll likely then set a closing date and it'll go to sealed bids.
I wouldn't offer more than valuation. The Scottish system has changed a lot since HIPs were introduced. Put in a 'cheeky' offer, and they can only refuse and counter offer. That's what we did - met half way.

It depends if it at a closing date or not
And where it is
Popular property in popular areas eg Glasgow west end ,Edinburgh,East Dunbartonshire and East Renfrewshire for the schools,houses will routinely go for way over HR value
If there is no closing date go in low and then try and negotiate at the best price you can
If a closing date you only get one chance
You need to give it your best shot

I think it had a lot to do with the area and what properties are going for at the time. Ours was on at o/o about £20k less than Home report value and we only paid £1500 over the asking. But I know other areas where properties are going for over the Home report value.
Worth having a look on scotlis.ros.gov.uk to see what other houses in the area have gone for recently.

Hello all! Thanks so much for the advice and for sharing your experiences!

It's a nice area but not an urban one and there isn't a high turnover of properties - especially at our price range. I've noticed that smaller flats (which can be turned into holiday lets) and the top-end houses (it's a pretty affluent area and a popular retirement spot) seem to move off the market far more rapidly. We're looking at family-sized homes which all need a fair amount of modernisation. Like I said they've been hanging around for a while!

Right now we can't really afford to pay anything over what our mortgage will cover - given the need to renovate as I said we'd prefer to save what ready cash we do have. So I'm hoping the vendors will take offers rather than go to a closing date. We'd be quite happy paying the valuation price on all of these properties.

WeeM, the scotlis website is an absolute procrastinator's heaven! It's very interesting seeing the exact plots.

Mybaby good luck with your offer! I think you're right about the problems with valuation / unrealistic vendors.

I must admit though that I do really like the HIP system up here. It's great to go to viewings with a bit of insight already into what the potential problems with the property might be.

Only two sleeps until viewings! I'm like a kid before Christmas.

@TakingtheLeap it’s amazing isn’t it, could spend ages looking stuff up!

You need a local solicitor who knows the property market well and who will be able to advise you on property sale prices relative to the home report/offers over in that area as it will vary by area.

I bought in East Ren recently and paid quite a bit over the home report, but I also sold my house in a different area for well over the home report.

Updated! Viewings on Sunday and found two places we'd happily buy - one that we really love and one that we really like, if you appreciate the distinction!

We didn't get to talk to the vendors of the first one (it's in executry so currently standing empty) but the agent muttered about it having been on the market for a fair while. The vendors of the second place showed us round and said they would consider taking the valuation price if that was what we offered.

We're going to go in with an offer a little under the valuation for the first place with the aim of going up to the valuation. If the vendors don't take that we'll offer on the second one. Trying to stay calm and not dream too much about either property though it is hard!!

So a question for all you Scottish home-owners! -- what would you do with a concreted and shady courtyard space in Scotland?! That's what the second place has and I'm trying to 'imagine' it into a slightly more prepossessing space. Pinterest is no help at all because it envisages bright sunlight and sodding lemon trees.

Jam FYI you can sell a house to someone else even if you have other notes of interest in. A note of interest isn’t legal and a seller can sell to whom they want.

It is true that a note of interest is not legally binding but it would be very unusual for the agents not to at least let you know if someone else has expressed an interest and give you the opportunity to bid

Not unusual at all. As long as he agent is good and does back ground checks on all buyers. Example being cash buyer v someone not on the market yet.

Fortunately no worries about notes of interest for us anyway. Rang up the estate agent about our favourite property and they said they were happy to take a verbal offer immediately - went in at £7500 below the listed offers over price. It was a whole 8 hours ago and it feels far too long!

Well done

Thanks user! Fingers crossed.

After negotiation offer at valuation price was accepted! Ahh!

Can anyone tell me about how the mortgage process works in Scotland with regards to the valuation? I know that south of the border people can hit snags when the mortgage valuation comes back as lower than the offered price, but I am assuming that here the lender will take the cue from the Home Report valuation?

Ahh congratulations! :-)
All very exciting!

Having just bought a house in Scotland myself (got the keys on Friday) I hope to help having just been through the process. It can seem a bit of minefield with the different system. The valuation that the mortgage providers will use is the one on the home report. Your lenders will have to contact the surveyors that did the home report. There was something about they have to get it on the banks headed paper - if I remember correctly (the last 2 months have been a bit of stressful blur). Once the surveyors send the lenders the home report that confirms the value. So my mortgage lender told me to ignore the valuation fees that were appearing on mortgage paperwork as they didn't apply to me.

Hope that helps!

pusheen

Ahh, thank you so much - that's massively helpful! I suspected / hoped something along those lines. It certainly reduces the stress to know that if we are offered the mortgage, it will match the valuation price on the Home Report.

Congratulations on your new house!

Container garden with ferns, hostas, iris sibirica/chrysographes, tricyrtis formosana, ophiopogon and sedge grasses...might get away with meconopsis, primulas, rhododendron, bamboos and evergreens for structure. Just rattling off what's in my shady spot. It's worked well.

All will need watering and then some in containers, but you can rig up irrigation in containers if you have an outside tap. Hozelock do some kits. Good luck with the move!

Just realised you're going to the favourite one, not the second

Mybaby

Gaga, thanks! I'm sure those will all also work in the (much larger, but still shady in places!) garden of the favourite house.

If the Home report is quite recent it should be ok particularly as you have offered at valuation
Have seen a few problems where HR is old and offer is substantially lower
Surveyor in those circumstances will normally value it at around the price you offered as being the best indicator of current value
Most lenders will be happy to proceed on basis of the HR,updated if necessary but some insist on own surveyor

Thanks user!

Saga continues, of course --- our DIP with Nationwide was 'referred' today so we have had to send in some documents and await approval. Our mortgage advisor says in his experience about 75% of cases that are referred are ultimately approved, but it's still super-stressful!

Anyone have any recommendations for staying sane throughout buying a house?

Your mortgage lender will ask for a transcript of the home report and base their lending on that. Good luck.