House buying in Edinburgh - what to offer?

mattie_uk

We're just about to put an offer in on a house in Edinburgh, but we're getting mixed signals on the 'offer above' level.

The offer above value is about £25k below the valuation, so we were looking at offering the valuation but we've been told that it's usual for houses to go for a lot more. Given it's fixed bid before closing, we can't iterate to figure what the buyer is truly after. We like the house and the sellers (quite a novelty to meet the sellers, makes a pleasant change to being shown round by shiny-suited estate agents in England!) so we would hate to miss out by going too low if we could ahve raised extra to seal the deal, however I'm not prepared or funded to offer silly money just to be on the safe side.

Are there any effective rules of thumb to follow in assessing where to pitch our offer? I've had advice to go for 20% above valuation, which I thought was mad and would mean we'd never be able to afford it anyway. It would also mean the valuations are meaningless from a buyer's perspective, which would make it tricky for us as we've no knowledge of the Edinburgh market. We've just sold our house in England and have found this house in our first week of real looking, so given it will be the fist house we've offered on in Scotland, so we're not sure how the process works or of what expectations are.

All advice gratefully received!

davidmcn

Your solicitor ought to be able to advise (helps if it's a local one).

I found it helpful to monitor recently-sold properties and check how the registered price compared with the Home Report valuations - came up with a rough average which at least reassured me I wasn't offering too much. Doubt there's a general average - you'll see from ESPC's figures that the market varies depending on the neighbourhood and type/value of property.

Caz3121

It can really vary by area. Properties in good school catchment areas can be very high..I have seen properties sell for £100k over home report value (20%+) other areas may sell much closer to valuation.
As said, your solicitor should be able to advise for the area
A colleague in the last month lost out on a (8 notes of interest) property having bid 10% over valuation but was successful on another with 8% over

mattie_uk

Thanks both for advice.

The solicitor is being a litle cagey, suspect they themselves don't really know and don't want us to kick up stink if their advice doesn't prove successful! They have said that, in their opinion, going at or near valuation will be too low, so we'll have a think tonight.

We'll take a look at averages tonight, but closing date tomorrow so we might need to go with gut feel slightly.

I still find it odd that the home valuation seems to bear such little relation to the price - I understand that it's an informed estimate, and is perhaps intended to support mortgate lenders more than buyers, but I'm amazed they can be out by such significant amounts. A bit of an eye-opener and it makes gauging what we can realistically go for quite tricky, but we'll just have to get used to it!

I also notice the stamp duty equivalent is 10% for elements above 325k, which makes raising the offer increasingly expensive.

googler

Have you hired a local solicitor? One based in Edinburgh?

And have you Noted Interest in the property through your solicitor? If you haven't, there's every possibility it could sell without you being given the chance to offer.

Your lender will lend up to the purchase price or Home Report valuation, whichever is lower. You need to be sure your lender is up to speed with the HR system in Scotland, and that they will accept the seller's HR. If not, you could find yourself paying out for your lender's survey. This may be an issue with a lender primarily doing business in England and Wales.

mattie_uk

We've got a local solicitor, athough using a mortgage advisor based in England - will check if he can arrange a mortgage set against home report. We'll be paying between 45-50% deposit, so we'll not be borrowing anywhere near home report value - at least, I hope not!

We've noted interest through the solicitor, and have spoken to the sellers directly a couple of times and they're aware we're making (and keen for us to make) an offer. Closing date tomorrow 12:00pm, all very exciting!

agrinnall

20% above valuation seems a lot unless it is a property in partucularly high demand. There was a time, before the crash, where such a figure might well have been more common, but it sounds to me more like Estate Agent hype these days. It's a pity your solicitor isn't being more helpful, back in the days when I was buying in Scotland mine would have been much more willing to suggest a suitable ballpark figure. If you don't manage to get this property I'd consider finding a better solicitor (not mine unfortunately, she has retired).

sheramber

If it is going to a closing date that means there is a lot of interest in it.

A few years ago my nephew offered 35% over the value and did not get the house.

My son bought his house 4 years ago and got it for the Home Report value. Offers over figure was £20k below Home Report value

Kinski

We paid 25k over the asking price for our semi in an area of Edinburgh, two years later another identical semi came on the market and they paid 37k over what we paid for ours. It really depends on the area your moving to, the likes of Leith where we used to live is very popular, an identical house to the one we used to live in sold for 100k over what we sold ours for the year after we left.

mattie_uk

Thanks all - we'll no doubt end up considerably above the asking price, and we'll find out soon enough if we've got it right. If we don't get it at least it'll help calibrate a little.

DottieDam

mattie_uk wrote: »

Are there any effective rules of thumb to follow in assessing where to pitch our offer? I've had advice to go for 20% above valuation, which I thought was mad and would mean we'd never be able to afford it anyway. It would also mean the valuations are meaningless from a buyer's perspective, which would make it tricky for us as we've no knowledge of the Edinburgh market. We've just sold our house in England and have found this house in our first week of real looking, so given it will be the fist house we've offered on in Scotland, so we're not sure how the process works or of what expectations are.

All advice gratefully received!

We left Edinburgh because most properties were going way above the valuation, which meant we would have had to have that on-top of our deposit.

Expect people to put in high offers and maybe be prepared to lose a few times to gauge the system!?

Good luck! On the whole, I much prefer the Scottish house-buying system even if I have been perpetually confused and family members are full of useless advice!