Mitchy260

Im planning on buying a house in Scotland. I want to buy in or around Perthshire.

However im not sure on what the guidelines are in scotland reference bidding on a property. Ive heard lots of rumours, i just want to find out for sure.

Scouring Scottish online properties, a lot seem to be offers over

The usual events of down here in England, you see a house for £150000, you put in an offer of £140000, this gets declined so you up it to £142-£143000 and you get the house saving yourself £7-8000.

In Scotland though, Ive heard of closed balloting. Highest bid in an envelope wins?

What a stupid way to do things

Now for instance, what happens when you put in an offer and the closing date is 2 months away? You wait 2 months only to find out you have been outbid. What a waste of 2 months and then again you need to get the ball rolling for another house with the same possibility of being outbid.

To get round this if your needing a house quickly can you bid on multiple houses? Surely this would have its downfalls? What would happen if you were the highest bidder on 2 or 3 of the properties you bid against?


Another question, i see a house with offers over £150000 and i really like the house. I put in a maximum of £170000 thinking this will be enough. The time frame ends and indeed £170000 is enough! However what if no-one else put in any offers, then surely i have overshot the mark and ''wasted'' £20000?

Someone please tell me this is not the way the housing market operates in Scotland? Scotland is different to England in many ways and being Scottish myself sometimes in a lot better ways (Complete smoking ban for instance) but i cannot get my head round what seems to be a complete pain in the **** buying a house in scotland is going to be.

Or is all this rumour control and things work exactly the same as they do down here in England

Richard_P

You are correct that is how it works in Scotland.

However unlike England and Wales there is no pissing about with will they buy, wont they buy etc. Once you make and offer and it is accepted you are legally obliged to buy the house. No ridiculous chain breaking down antics up here

Most of the time you can make an offer and the owner will either accept or decline.

Often on properties that attract a lot of interest - such as reposessions every local imbecile flocks round for a look and pops in a bid just to spoil it for first time buyers. To maximise £ on this type of property the closed bidding you described often occurs.

I'm looking for my first property just now and it isn't easy, I'm mainly looking at fixed price properties but I'm going to look at an offers over next week if I get the chance, who knows what bid i'll make

Edited to say the smoking ban is indeed good stuff, lot more smell of farts and the great unwashed kicking about the pubs though

imlach

Yep, you've got it mostly right - this is how it works in Scotland.

As a guide, the last house I bought ended up going for £90k over the asking price, and there were 16 offers, with 3 of the offers being withing £1k of my winning offer.

That, however, is not too common. Houses generally go for about 15-20% over the asking price. Remember that this is a marketing technique....the "offers over" price would be set 15-20% below the market value of the property to generate interest.

Because of this, even in an "offers over" system, you shouldn't be paying too much over fair market value unless you yourself go mad with your offer.

Also, while the offers over system seems unfair if you are the only bidder, put yourself in the mind of the seller (as you will be in a few years time!)

imlach

2 months to wait for a closing date would be unusual. One method around this is to make an offer straight away, stating that this offer is only valid for a few days, and let the buyer sweat over whether to accept it or not. I'd certainly not hang around 2 months waiting to see if an offer is accepted or not. If the buyer decides to stick with a closing date, you have to take your chances and decide how much you want the property - and decide whether to up your offer.

Yep...you can bid on as many as you like.
If you are successful with one, withdraw the bids on the rest. Bids are not binding. Once a bid is accepted, it is not legally binding until both parties accept each others terms & conditions (a process known as "concluding the missives" - which can take a few weeks). After this point, both parties are in a legally binding contract, which, of course, you can withdraw from, but with financial penalties due to the seller.

fast bloke

Very well put from Imlach, but to clarify - A closing date isn't the defined closing date, but merely the latest closing date, so the vendor can close earlier with the right offer

Mitchy260

Seems like it is more advantageous to the seller rather than the buyer then and difficult for 1st time buyers.

With offers over, will the estate agent let you know if any bids have been put on the house? The seller could be looking for a quick sale and the house could have been on the market for months with no interest!

Surely that would make a case for a lower bid than the offers over price?

In England, people would see that and bid in at £10-£15000 under the guide price! People quick sell for many reasons, especially if 1st time buyers are involved with no chain.

If your involved in a chain, a mortgage can be a hassle, however if you have the mortgage upfront as in 1st time buyers the mortgage would go through a hell of a lot quicker and in my opinion should go cheaper aswell!

Its just like purchasing a car with cash or a cheque. You'll always knock a bit more off with cash.

I really cant see any advantages for buyers in mortgaging this way. I am now being put off the idea! Is there fixed price buying aswell?

Trout

iTrader: (1)

Concluding the missives may take weeks - but typically is much quicker.

As a rule of thumb you are pretty much tied into buying it once your offer is accepted. Part of the offer will be a deposit and that is handed over within a day or two of the offer being accepted.

A lot of properties with offers over will only fix a closing date when the selling solicitor guages the amount of interest. Typically a lot of interest means short closing dates. Conversely no closing date means get in there and negotiate - you are in control rather than the seller.

Your solicitor will give you guidance as to the likely value and what to bid. In a rising market the 'over' bit will stretch our to 30-40%. In a static or falling market anywhere between 5% and 15%.

I once bought a house in Edinburgh at 25% below the offers over price as it had been hanging around for a few months.

If you are unsure of the system or uncomfortable with it then go for a fixed price - although fixed price tends to offer less value. Usually houses that are hard to sell for one reason or another. Again my very first house in Scotland was fixed price and I sold it after ten months at a 15% profit so not all bad.

Bottom line is that it is probably a better system than England but the stress is at the front of the process where in England the stress build right up to moving in day! (Although that first house I bought I could not move into as the solicitor had lost the keys on sale day!!)

Good luck

imlach

Have to say I've never experienced this, nor does it seem common. No deposit is generally put down - all the monies are paid on the day of moving in.