Greedy vendors at offers over

alyth

hi - our house is under offer at the moment, and we found a fantastic property that we wanted, and put in an offer last week. The house is on at offers over £335K, and as we're in Scotland we put in an offer of £355K, with a view to going up to £380K - the property is advertised as 6 beds but 3 are tiny, 3 are in the eaves, and it needs new bathrooms, all 3 of them! The response came back today from the solicitor - they want at least £450K!!!!!

I'd previously been told by the solicitor that they were hoping for £400K, but would start negotiations at £370K - so why are they being so damn greedy! The property's just off a main road, been on the market for at least 4 months, and we were the first to put in an offer! Now our house was on at £375K and we were offered £425K at a closing date, which was fantastic as we would have taken £375K to be honest! Are people just getting greedy in Scotland, has the solicitor put the house on the market to generate a lot of interest and this has perhaps backfired, or am I being totally naive in thinking that over £100K over the asking price is just ridiculous!

And a further grumble, our house was surveyed over 3 weeks ago, and our offer is still in subject to survey as the purchaser's solicitor won't respond to our solicitor! We've put a time limit on of tomorrow at 12 otherwise we're rejecting their offer, but of course the others who bid for the house at the closing, which was 4 weeks ago, are likely to have found somewhere else by now, so we're now probably going to be forced to take the house off the market over the winter. Honestly, I despair of the whole process! Anyone who think the Scottish system is better than the English system should try living up here!

real1314

why is it greed?

They want a certain amount, they won't accept the amount you offered.
That's how all sales, property or anything else, work. Maybe the scottish system has mis-led you to some degree, but I'm not familiar with it, so don't know if the range from the "offers over" figure to what they want is within a normal range.

Robert_Sterling

The vendor can ask for as much as they like.
What they actually get is another kettle of fish.

jennifernil

House near us was advertised at offers over 275. Don't know what they were hoping for but last week it went to a fixed 350 and is now sold. So a good percentage over the OO price. Some areas have a premium of 40% apparently, which I think is totally rediculous!

lynzpower

I dont think this is unreasonable greed. If I truly believed that my prooperty was worth 100k more than the offers I was getting, I certainly wouldnt let it go for the lower offers.

this system in scotland just seems bonkers to me though

Rimo2021

With regard to your sale you need to get a new solicitor. When he accepted the subject to survey offer on your behalf he should have made sure the survey was done immediately (i.e within 24 hours) failure of the prospective buyers to do this indicates they are not very serious and you should have been able to then move on to your next highest offer within a couple of days.

Rimo2021

lynzpower wrote:

I dont think this is unreasonable greed. If I truly believed that my prooperty was worth 100k more than the offers I was getting, I certainly wouldnt let it go for the lower offers.

this system in scotland just seems bonkers to me though

No - whats bonkers is basing your offer on what the seller wants for his property instead of what the property is worth.

If you saw a 2-bed semi in the outskirts of Birmingham for £1,000,000 would you think to yourself 'well its been on the market for 12 months so he might accept an offer of 15% less'

Er no. I hope not. You would think to yourself this house is worth around £250,000 (or whatever amount you RESEARCHED the property to be worth based on others in the neighbourhood) and offer that. The reason in Scotland we have the offers over is that when selling something it is better to get the other party to name the first figure - if they name more than you imagined you are a winner - if they name less than you imagined you are still not a loser because you just refuse the offer. Simple negotiation technique - Get the prospective buyer to show their hand first. This way of doing it suits the seller but then as they are the seller they have the right to choose the method of selling which will get the best price.

The asking (England) or offers-over (Scotland) price are only an INDICATION of what the seller is hoping for - anyone who just offers what the seller says the property is worth is a fool.

Many people in England put their property on the market with a particular asking price even though they are really expecting and prepared to accept less. Estate agents will say something like 'we'll put it on at £300k with view to getting £270 - £280' The only difference between that and the Scottish way is the amount between the 2 figures i.e published amount (asking in England or offers-over in Scotland) and the amount the property is really expected to sell at is greater.

The only bad thing about the Scottish system is that it has recently started being polluted with the worst aspects of the English system - in other words the ridiculous length of time between offer accepted and the deal becoming binding. In Scotland this used to be a matter of a couple of days (and still is in many sales) leaving no room for gazumping, gazundering and arguing over how many lightbulbs were included in the sale (or oil in the Aga). Chains were things you wore round your neck or secured your bike with.

Luckily a 'cure' for this disease is being used by sellers - 'standard missives' which basically prevents the buyer from messing around and deliberately drawing out the length of time between offer accepted and deal becoming binding.

jennifernil

While most of the selling/buying process up here seems to work better than down south, I feel that the offers over price can be very misleading. The price should be set far closer to the price sellers are really expecting. Our son has given up looking for another house after having wasted over a thousand pounds on surveys.
One place he had surveyed the OO price was 350k, the survey valuation came in at 425k, and the sellers really wanted 500. The survey valuation is invariably less than the final selling price, but these huge differences are getting out of hand.
What is the point of it?
25 years back the difference between the OO price and the expected price was in the order of 10%, now it is just total madness!

PropertyGuru

If they sell it, they were very wise to ask for the extra 100k. If they don't they are fools.

I must say, the whole system is a bit strange. If they wanted 450k for it, why did they put it on at 350k??? Shouldn't they have said 'offers over 450k'???

Macnab

The most annoying thing is, for example in Perth when we had an influx of folk from Edinburgh happy to commute and folk moved up from Norwich to work at Norwich union they found the house prices cheaper than what they were used to and bought at whatever price they wanted. A house will be on for offers over, and maybe valued for maybe only £10,000 over the asking price but the vendors will want more than that. The problem then comes if you hadn't made that kind of profit on your house sale you're snookered as you can only get a mortgage for what the property is worth, not what you paid for it. A lot of the house buying in Scotland is very good, but the offers over system has got slightly out of hand in recent years and when researching in the paper for a property you have to look at several price brackets under what you can afford as the price will shoot up anyway. Then you have to pay out for a survey before putting in an offer, which maybe be rejected so thats money down the drain or suddenly after a house being on the market for ages and you show an interest it will go to a closing dates and closed bids are only accepted

Rimo2021

jennifernil wrote:

While most of the selling/buying process up here seems to work better than down south, I feel that the offers over price can be very misleading. The price should be set far closer to the price sellers are really expecting. Our son has given up looking for another house after having wasted over a thousand pounds on surveys.
One place he had surveyed the OO price was 350k, the survey valuation came in at 425k, and the sellers really wanted 500. The survey valuation is invariably less than the final selling price, but these huge differences are getting out of hand.
What is the point of it?
25 years back the difference between the OO price and the expected price was in the order of 10%, now it is just total madness!

There's no doubt it's a very different way of selling to England. How you have to look at it is the seller is basically saying 'I have a house to sell - what will you give me for it?'

Why should he show his cards first by mentioning a figure??? He's saying "you're the one who wants my house YOU open the negociation".

Opening by giving away what you expect is simply not the way to get the best price - If you are secretly hoping for £300K and someone comes along and offers £350K you are laughing all the way to the bank whereas if you had advertised the fact that you were hoping for £300K they would have probably offered £280K.

This is why it's done this way. It is simply the best way for the seller to get the best price. And it's the seller who chooses the method to sell.

Did you see the episode of 'location, location' where a house Kirsty and Phil found for a couple went to 'sealed bids'? What happened was that the couple ended up bidding literally 10s of thousands of pounds over the next highest offer, it was a massive amount over what the sellers were expecting. The sale fell through as the estate agents sent the list of offers to the prospective buyers instead of the sellers so they pulled out - but if this hadn't happened the sale may well have gone through (it probably would have in Scotland)

The system in Scotland also prevents the estate agents pushing up the price by inventing fake offers.

I do sympathise with your son but what he needs to do is put in his offers 'subject to survey' then he only pays the cost of a survey if the offer is accepted. Most solicitors do not charge for putting in offers.

I totally agree the difference between offers-over price and expected price makes it difficult for someone who does not understand the system but the fact is that this way gets the best price for the seller. It's madness to base an offer on the published price whether it's 'offers-over' or 'asking'. If a little 2-bed flat you were interested in was on the market for £750k would you base your offer on that figure - I hope not. You would use your brain and research what a 2-bed flat in that location was actually worth and offer that.