How much should I offer?

[surlycurly]

Hi all. I'm in Scotland and saw a house that I love. I want to make an offer on it (closed bids/ closing date) and I need to gauge how much to offer above the home buyers report valuation? Any thoughts in terms of a percentage?

If you live it and you’ll live there a while. Offer what you think it’s worth (to you) and what you can afford to pay.
It’s really that simple.

You can find out what similar houses nearby have gone for on the registers of Scotland website. That can help a bit, though the whole closing date system still feels a bit like pin the tail on the donkey.

I should add, we basically offered as much as we could taking into account the size of our deposit and the fact that lenders will lend a percentage of the home report value not what you actually pay (sorry, you probably know all this but I didn't until my mortgage broker explained it to me!)

I'm slightly suspicious that we bid more than we needed to but ultimately we didn't want to lose the only place we'd seen and liked over £500.

This is exactly the problem I'm having- I can afford a bigger mortgage but the valuation has come back lower than I'd hoped. It means I need to find more cash to add to it! It's a popular area and I know there are at least four offers already although it doesn't close until Tuesday. Just not sure how high to go

The home report was lower than you hoped?

We paid about 7% more than home report and about 20% more than the offers offer price. A colleague recently got under the home report.

Your solicitor handling the purchase will advise you on how much to offer over the asking price.
If you’re in Edinburgh, this will be nearly £40,000 over the asking price for a small flat - the market is red hot at the moment.

Depends where it is. If there’s four bids in already, it will go for way higher than the asking price. If you really want it, put in as much as you can afford.

Thanks all. We aren't in Edinburgh but a smaller city and the house is in one of the best postcodes, although it's not remotely fancy. I'm scared stiff to lose it but I can't go crazy because I simply don't have the money, no matter how much I want the place.

What is the HR price? Do you have somewhere go sell before you can buy?

Don't offer more than you can afford. There will be other places and all too easy to over commit in closed bid system. I am also in Scotland in good area and prices are a bit all over the place. Popular houses are going for large premiums to O/O on closed bids but slightly more expensive houses people think they can't afford are sticking.

The big pricey houses are prob sticking because the SNP replaced stamp duty with a massively more expensive land and buildings transaction tax. It’s a higher percentage than you pay in England, and has damaged the market. People can’t afford to move up the ladder, so are staying in their smaller starter homes, which means far fewer of those are on the market, driving the price of small homes up to ridiculous levels from all the competing buyers.

This I did not know @Babdoc

No, that's not it Babdoc. In our case there are a lot of new 4/5 bed new housing developments. The prices of these are obviously visible and the housebuilders release them to the market to match demand. This puts a ceiling on "executive detached family home" prices. This would apply to the "good school areas" of East Ren and Dunbartonshire.

FWIW average HP in Scotland is £145k as opposed to £250kish England. There is no LBTT below £125k. On HP of £300k English stamp duty is higher than Scottish LBTT. SLBTT is slightly higher for £400k houses, but there are not very many of them outside of Edinburgh and a few other select districts around Glasgow and Aberdeen.

Averages are pretty meaningless - you’d struggle to find even a tatty one bed flat in Edinburgh for anything as low as £145K! I’m currently helping DD2 to flat hunt, and very basic 2 bedders are going for over £230K in Edinburgh. You need to look at individual regions or towns - a national average is irrelevant.

Yep but a "basic 2 bedder" in Central London would be £600k upwards so somewhat apples and oranges to rail against the SNP re the SLBTT if that is the comparison. Anyway we digress as Op is not looking in Edinburgh, which constitutes less than 10% of the Scottish property market. (If you're DD2 is struggling then there are some very nice 1/2 hour commutable areas outside Edinburgh where £230k will go a lot further.)