Offers Over - Scotland Help

RAH25_2

Hello all,

My husband and I are first time buyers. We have seen a property we really love after two viewings. My query relates to the 'Offers Over' concept in Scotland. The property is currently only the market for Offers Over £119,000 however the home report valuation is only £120,000 (£1000) difference.

From what I have read online sellers generally tend to put their properties on offers over for much lower than the valuation to generate notes of interest and then go to a closing date at which point potential buyers would submit their offers before closing/bidding war. I understand this, but is it a bit odd to put it on the market for offers over at only £1000 less than the value?

Obviously we love the house but surely people wouldn't want to bid thousands more than the property is valued at so that does leave much scope. Just to put it out there we live in a small town in North East of Scotland.

In terms the of the offers over part could we submit an offer straight away or is it the case that all sales of these types HAVE to go to a closing date?

Thank you
Raychelle

Pixie5740

RAH25 wrote: »

Hello all,

My husband and I are first time buyers. We have seen a property we really love after two viewings. My query relates to the 'Offers Over' concept in Scotland. The property is currently only the market for Offers Over £119,000 however the home report valuation is only £120,000 (£1000) difference.

From what I have read online sellers generally tend to put their properties on offers over for much lower than the valuation to generate notes of interest and then go to a closing date at which point potential buyers would submit their offers before closing/bidding war. I understand this, but is it a bit odd to put it on the market for offers over at only £1000 less than the value?

Obviously we love the house but surely people wouldn't want to bid thousands more than the property is valued at so that does leave much scope. Just to put it out there we live in a small town in North East of Scotland.

In terms the of the offers over part could we submit an offer straight away or is it the case that all sales of these types HAVE to go to a closing date?

Thank you
Raychelle

Properties advertised at o/o doesn't necessarily mean it will go to a closing date. You also don't have to offer more than £119k just because the property is being advertised as o/o. I live in the North East myself and keep an eye on ASPC and it's not common to see many properties go to a closing date these days. Your solicitor should be able to give you a steer when submitting your offer.

davidmcn

RAH25 wrote: »

From what I have read online sellers generally tend to put their properties on offers over for much lower than the valuation to generate notes of interest and then go to a closing date at which point potential buyers would submit their offers before closing/bidding war.

No idea what you've been reading, but it might be referring to what was common practice in the era before Home Reports came in. Now everyone knows what the "real" valuation is from day one.

Have a look at other properties and their asking prices (compared with their Home Report values) if you want to get a better idea.

Sibz

As pixie says OO doesn't mean there is a closing date - often if there is a closing date it will be stated prominently on the listing.

It all depends on the sellers reasons (which is always a guessing game - at least to begin with). If you contact the EA or whoever is handling the sale you can put in any offer you like. The seller will likely have given the agent a minimum amount so the agent would reject anything below this, they may not have also.

Have you checked properties in the street/area that have sold most recently and what they sold for?

googler

RAH25 wrote: »

The property is currently on the market for Offers Over £119,000 however the home report valuation is only £120,000 (£1000) difference.

Your lender will most likely only lend up to the valuation, which will be the HR valuation, unless your lender insists on a separate valuation from their own panel of surveyors. You may want to talk to them first to check their policy on this, unless you are buying with ready cash, or can afford to put in extra cash over and above £120,000.

RAH25 wrote: »

From what I have read online sellers generally tend to put their properties on offers over for much lower than the valuation to generate notes of interest and then go to a closing date at which point potential buyers would submit their offers before closing/bidding war. I understand this, but is it a bit odd to put it on the market for offers over at only £1000 less than the value?

Much of the online reading in this respect can be out of date, and basically "historic". You will have to hire a solicitor to note interest and make your offer. Part of what you're paying them for is sound advice, so ask them about recent sales in the area. They should know. It's sometimes advisable to pick your solicitor in the same locale as which you are buying, for this reason.

RAH25 wrote: »

Obviously we love the house but surely people wouldn't want to bid thousands more than the property is valued at so that does leave much scope.

That will depend - if there's someone out there who can get a mortgage for £120k, and has an extra £6k in hand, and they love it too, they could offer £126k. If you have mortgage £120k and £2k in hand, you could only go to £122k ...

RAH25 wrote: »

In terms the of the offers over part could we submit an offer straight away or is it the case that all sales of these types HAVE to go to a closing date?

You can submit an offer anytime. If the amount and other terms are acceptable to the seller, you could get a Yes.

If not, they will either reject it outright, expecting you to come back with a higher offer, or keep your offer on the table whilst declaring a closing date. They're likely to do the latter if they already have some notes of interest.

Your solicitor needs to establish if there are any notes of interest at the moment, and this will guide you as to what you do next, along with the time the property has been on the market.

If it's been for sale for yonks, and there's not one note of interest on it, you could offer low, and work up to an agreeable figure. You are not obliged to offer above their offers over figure, you can offer below this. If it's only gone on the market recently, and others are interested as well as you, you may have to start higher. Establish the level of interest, to guide you in your offer.

The seller's strategy may be along the lines of "We need £119k in order to move, so that's the O/O price" - in which case, you may find them very insistent on getting at least £119k.

If they could not move at a selling price of (say) £112k, then there's no point in pitching that as a low offers over, hoping to get £119k or £120k

System

If you want to make an offer, make an offer - I've always tried to put in offers that have an expiry time/date on them and also said that if they decide to set a closing date the offer will be withdrawn. (it's worked twice so far out of four purchases)

RAH25_2

Hi everyone
Thank you ever so much for the replies. I got in touch with my solicitor and she put in a note of interest and then came back to me and said they have now gone for a closing date of 31st January (two weeks of waiting ) . I feel a bit nervous but completely understand it may be the case we don't get it. Solicitor reckons we have to offer over £120,00 but has advised his opinion is we shouldn't offer any more than £125,000.

I did ask can we not just go ahead and put an offer in now but was told not possible due to closing date as they have had other notes of interest bit gutting.

I guess its now just a waiting game and a some restless nights

googler

RAH25 wrote: »

I got in touch with my solicitor and she put in a note of interest and then came back to me and said they have now gone for a closing date of 31st January (two weeks of waiting.

Probably means they have other note(s) of interest, but not many. If there were a good few, they wouldn't wait two weeks.

Your solicitor should be asking how many they have


I feel a bit nervous but completely understand it may be the case we don't get it. Solicitor reckons we have to offer over £120,000 but has advised his opinion is we shouldn't offer any more than £125,000.

Has your solicitor given you good reason to offer over this? Comparable sale prices, etc?

I did ask can we not just go ahead and put an offer in now but was told not possible due to closing date as they have had other notes of interest bit gutting.

Sorry, but I disagree, and I'm sure the poster at #6 above does, too.

Whilst it may be convention to wait until nearer the closing date to put an offer in, if you absolutely want to offer right now, and insist that your offer be replied to Y/N before the closing date, you can do so. The solicitor is instructed by you, and should follow your instruction except where prohibited from doing so by the law or law society procedures.

You have to be prepared to make this your best and final offer, and be ready to walk away if you're going to follow the advice above from r_sole above, i.e. "this is my offer. If declined now, it will not be resubmitted in revised form at the closing date"

The procedures etc. regarding closing dates are on the Law Society of Scotland website for all to see, and there's nothing there that says a buyer/sol CANNOT offer in advance of a closing date.

The note of interest procedure is a courtesy between solicitors and agents, and carries no legal status at all. There's nothing in the law that says you cannot offer if a selling agent has notes already in place. There's nothing in the law that says a selling solicitor with notes is forbidden from selling without giving other notes a chance to offer.

EDIT - I've just looked at the guidelines, intending to post a link, and there seem to have been additions since I last looked; the above may be subject to revision if these changes affect it.

davidmcn

There is also the risk, however, of "showing your hand" too early and allowing agents to say to other parties "you'll need to at least exceed the offer of £x we've had". Less chance of that if you submit the offer at the last minute before the closing date.

FTBuyerGlasgow

OP I was in the exact same position as you 5 years ago.

We viewed a house on the Saturday, loved it, phoned the EA on Monday to book another viewing and get more details about the house. Initial listing was OO£120k, they dropped it to OO£110k to get more interest.

EA told us another couple had put in a Note of Interest and that we needed to do the same if we wanted to bid.

Stupidly we did, closing date was set for the following week. Here was I thinking there was fierce competition for the house, another couple ready to bid and who knows how many others.

We bid £114,500, other couple bid £118,000 and got it.

Turned out the EA was playing both of the bidding parties against each other (there were only two of us).

Don't play their games.

If you are serious about the house, put in an offer now, ignore the closing date. Only bid what you think the house is worth and what you are prepared to pay.

Don't get in to a bidding war with yourself. You'll either end up forcing the price up beyond reason for someone else or end up buying a house for more than it's worth and regretting it.

My experience with a Closing Date was very bitter, we're looking to move again but if the seller's EA said it was going to Closing I'd say "thanks but no thanks" and walk away.

Nebulous2

The North-East of Scotland is a big area and varies quite a bit in saleability. Basically the closer to Aberdeen you are the more competition you are likely to have. Ellon / Inverurie / Stonehaven are likely to benefit from the bypass and could have more interest. Some of the towns on the Buchan coast would rarely achieve valuation, unless it was a particularly desirable property.

Go to google - enter "sold prices and the name of the village you are looking at. One of the first links will be a rightmove one, with a list of what houses have actually gone for, most recent first. That will help you work out what is happening locally.