Scotland FTB - buying outright, advice needed.

fart

Hi all.

I'm in Scotland, where i know the process of buying is slightly different than it is in England.

I'm looking to buy a house outright to save on cost of renting etc and I have found the perfect house for us, which is on the market for Offers Above £55k. In Scotland (not sure if it's the same in England) you have 'Fixed Price', 'Offers Above/Over' and 'Offers Around'.

This is how i understand those terms:
Fixed Price means that if you offer the price it's pretty much yours.
Offers Above means that this is the price they are willing to go down to (this house is actually valued at £57k).
Offers Around means that you can make them an offer.

Feel free to correct me if i've gotten any of that wrong

The difference between this house and others in the area are that it's on the cheaper side even though the quality is high - single survey says external structure is great, interior walls and floor are spot on, no subsidence and plumbing/electrics are decent and there is only cosmetic work to be done (dad's a builder so we would get this done on the cheap).

Anywho, we're actually willing to pay up to £60k for the house as it's literally ideal for us, and this kind of house has been selling really quickly round here recently (drive, garage, nice garden, spacious etc). This was confirmed on the phone by the estate agents who insisted it has gathered lots of interest. I know they say this for every property but i actually believe her this time.

Although the property is listed at 'offers above' £55k, it's only valued at £57k and although i've not looked at it yet (viewing on Friday) it appears from the home report that the boiler will need upgrading and it needs plumbing doing in the kitchen plus other minor bits and bobs. This is for starters - maybe i'll find more when i go to view.

My question really is as much as we desperately love the look/location/layout/particulars or this property, should we still go in at around £50-52k even though there is definitely going to be interest and it states 'offers above' or is it worth just going straight in at £55k?

Some things to consider:

We're buying in cash - straight up cheque written, bob's your uncle, move in. No mortgage, no lenders, no nothing. Money is sat here waiting.

The house appears to be (and i'm 99% sure it is) a repo job. Does this mean they will be more willing to sell quickly or more willing to just sit on it? If a bank etc is selling it are they more likely to just sell to whoever can pay up fastest?

We don't want to lose the house because we were trying to be too clever and were haggling over a few grand, even though the house is easily worth more than it's market value TO US.

Any advice on asking them to 'formalise our interest' IE; they let us know when an offer has been made to give us an opportunity to counter it, would be great.

Also, any help with what to do if we do decide we're going for it would be lovely. I'm unsure of how i would proceed, obviously i know i would have to formalise an offer, but in Scotland would i have to get a solicitor to do this? Would it cost a fee, and if it did cost a fee, would this be included as part of the overall cost of arranging the entire thing?

As far as i can tell the process would be Formal Offer, Acceptance, Solicitor sorts out things i'm not smart enough to know about, we get keys. In a nutshell?

Cheers people.

fart

Just to add - is it common for estate agents etc to inform potential buyers that there have been higher bids made when there hasn't purely to drive the price up? I mentioned this to a friend and she was worried that by me showing interest the estate agents could say they'd had a higher offer even though they hadn't, hoping i'd better it, in order to make more money.

WellKnownSid

fart wrote: »

This is how i understand those terms:
Fixed Price means that if you offer the price it's pretty much yours.
Offers Above means that this is the price they are willing to go down to (this house is actually valued at £57k).
Offers Around means that you can make them an offer.

Fixed price = make an offer
OIEO = make an offer
OIRO = make an offer

fart wrote: »

...even though the quality is high...
...and although i've not looked at it yet (viewing on Friday)...
...we desperately love the look/location/layout/particulars or this property...

Don't fall in love with something you've never even seen.

fart wrote: »

We're buying in cash - straight up cheque written, bob's your uncle, move in. No mortgage, no lenders, no nothing. Money is sat here waiting.

The house appears to be (and i'm 99% sure it is) a repo job. Does this mean they will be more willing to sell quickly or more willing to just sit on it? If a bank etc is selling it are they more likely to just sell to whoever can pay up fastest?

No mortgage is a real plus here, but at that price there may be other offers.

If there are, then the agents won't mess about 'talking you up' they'll just set a closing date and leave it to sealed bids.

You will be in a strong position if there are no other cash buyers as you should be able to complete quickly.

fart wrote: »

We don't want to lose the house because we were trying to be too clever and were haggling over a few grand, even though the house is easily worth more than it's market value TO US.

It's a business transaction. There will be others. Don't lose sight of that.

fart wrote: »

Any advice on asking them to 'formalise our interest' IE; they let us know when an offer has been made to give us an opportunity to counter it, would be great.

See a solicitor. If there is genuine interest it'll go to a closing date. Probably cost about £100 to place your offer.

beecher2

Don't make up your mind until you've seen it yourself, and in the meantime get yourself a solicitor. Ask friends/family for suggestions and get a few quotes - they'll keep you right on what to do and will put in a note of interest if you wish. You'll pay them one bill once everything's sorted out and it'll cover local searches etc.

I don't think you'll be told if a better off is given though - if there's the interest you think there will be a closing date with sealed bids. It isn't always the highest bid which wins - cash buyer could be seen as a better option but if it is a repo I suppose the bank will just go for the highest bid.

googler

fart wrote: »

I'm in Scotland, where i know the process of buying is slightly different than it is in England.

I'm looking to buy a house outright

...

We're buying in cash - straight up cheque written, bob's your uncle, move in. No mortgage, no lenders, no nothing. Money is sat here waiting.

Any advice on asking them to 'formalise our interest' IE; they let us know when an offer has been made to give us an opportunity to counter it, would be great.

You need to hire a solicitor to Note your Interest in the property. Selling agents won't regard you as serious unless you do. However, you won't find the selling agent will tell you any other offer in order that you can beat it. That's not how things work.


Also, any help with what to do if we do decide we're going for it would be lovely. I'm unsure of how i would proceed, obviously i know i would have to formalise an offer, but in Scotland would i have to get a solicitor to do this? Would it cost a fee, and if it did cost a fee, would this be included as part of the overall cost of arranging the entire thing?

You don't 'formalise your offer' with the aid of a solicitor, the solicitor tenders the offer on your behalf. The offer forms part of the contract to buy, therefore there's effectively no such thing as a verbal offer. You have to hire a solicitor before you make an offer.

If you hire a solicitor and buy this property, there won't be a separate charge for making the offer, as this is generally included within standard conveyancing fees. If you fail to secure this house, but later on buy another through the same solicitor, most solicitor firms will not charge you for unsuccessful offers - however, check their letter of engagement and fee quote when you hire them. If you offer on this house, fail, then leave the solicitor without buying another, they may charge you for work done - check letter of engagement and fee quote again.

googler

fart wrote: »

Just to add - is it common for estate agents etc to inform potential buyers that there have been higher bids made when there hasn't purely to drive the price up?

No. Unlike England & Wales, things are conducted with a degree of honour up here.

Assuming you view, that you like the property, and get your solicitor to make your offer (which specifies price, entry date, any other conditions and also your solicitor should make clear to the selling agent that you have no need of mortgage finance, nothing to sell, etc., enabling you to specify a quick entry date), there's a number of possible outcomes;

If there's little or no interest from others;

- The seller/agent accepts your offer outright, or
- The seller/agent negotiates with you over price, entry date, and you either reach agreement or not.

If there is enough interest from others (other Notes of Interest already having been received)

- The seller/agent could declare a Closing Date for offers, and invite all Notes to make an offer by this date, including yours. You can get your solicitor to increase your offer prior to this, but there'll be no discussion with you or your solicitor about the level or circumstances of other offers. The selling agent will reveal to your solicitor how many notes of interest there are, if asked. This can help you decide where to pitch your offer, as more Notes tends to equate to higher offers.

However, even if there are other Notes, the seller/agent is under no obligation to give them the chance to offer, and your cash-ready situation could sway them to accept your offer in spite of the other interest.

Process;

Hire solicitor
Solicitor verifies your ID, discusses your finances and how you will pay
2 Ask sol to Note Interest with selling agent, discuss other Notes, etc
View House
Inspect Home Report
Discuss offer with Sol
Sol makes offer
Accept/Decline/Renegotiate/Go to Closing Date

If offer declined, or fails at closing, repeat from step 2 above with another house

If offer accepted;
Formal acceptance goes to your sol
Your sol gets to view title docs to check what you're buying
Other legal exchanges go between your sol and selling sol
The two sols, with each client's agreement, 'conclude missives', at which point you are committed to buy
You sign a disposition prepared by selling sol, which is the legal doc transferring ownership to you on the entry date.
Your solicitor moves money to selling sol's account on entry date, and when this is done, you collect keys from one of the sols.

beecher2

Great post from googler, only thing I'd say is that you should always view a property and read the home report before putting in a note of interest.

fart

Some great posts guys thanks very much.

I've read the home report myself and i'm very satisfied with it - all structural elements of the house including roof and floors are solid, which is the main thing for me. Cosmetic work isn't a problem so i guess we'll see on Friday when i view what state it's in.

I guess i'd better go get a solicitor then.

goosander

Just like to add that whilst you can still negotiate even on a fixed price, if you offer under the fixed price, the vendor is still free to accept a higher offer.

This happened to me last year - On Friday I offered slightly under the fixed asking price, had the offer accepted, then on Monday morning was told they had accepted a better offer. The vendors had presumably held viewings over the weekend and told viewers that if they were interested they had to offer the fixed price (or higher) first thing Monday.

Essentially their is less difference than you might think between the Scottish & English systems. In England the deal is not done until contracts are exchanged & in Scotland the same is true until missives are concluded. There is a set of rules that govern how solicitors should act, but they don't all follow them - I understand the 'honour' a previous poster mentioned is not really legally enforceable.

WellKnownSid

googler wrote: »

No. Unlike England & Wales, things are conducted with a degree of honour up here.

Bull****.

I recently discovered, having concluded the missives on the house I'm living in now, that the agent 'offered' my house to our new neighbour.

googler

goosander wrote: »

Just like to add that whilst you can still negotiate even on a fixed price, if you offer under the fixed price, the vendor is still free to accept a higher offer.

This happened to me last year - On Friday I offered slightly under the fixed asking price, had the offer accepted, then on Monday morning was told they had accepted a better offer. The vendors had presumably held viewings over the weekend and told viewers that if they were interested they had to offer the fixed price (or higher) first thing Monday.

Define 'accepted' - had your solicitor received a written acceptance from the seller's solicitor?

Given the situation you outline, the Scottish Law Society instructions/practice notes to their members are clear - if the seller has accepted an offer from one party, and then instructs their solicitor to accept a second offer without the first buyer having withdrawn theirs, the solicitor should cease to act for the seller.

It's debatable what legal status that has, but...