Having difficulty buying a house in Scotland, due to strange 'offers over' system

Nurse_in_need

Hi all,

I'm looking for some advice on buying in Scotland, in Edinburgh to be precise. I am looking at properties for around £120k - 150k. I have a mortgage in principle agreed for up to £148k and I have 10% deposit saved up.

I'm having an annoying and reoccuring issue - say I see a property advertised as 'offers over £120k' with a valuation of £130k. Most places are going for £20 - 30k over valuation at present. Because it's over the valuation that amount needs to be paid in cash, as the mortgage won't cover anything above the actual value. So for a place with a valuation of £130k but selling for £150k, I would need £15k deposit plus another £20k in cash, £35k total for a place costing £150k! I'm finding this system totally insane and wondering if anyone had any ideas on what I could do? I was thinking that a 10% deposit would be enough but just now it's looking like I might need at least double that?

Also, im not eligible for first time buyer deals or shared equity schemes.

Any ideas anyone?

user1977

If you don't have enough cash to make up the difference, you'll either need to focus on properties which aren't going to closing dates, or lower the price range you're looking at. Not much else you can do, really.

theartfullodger

You can offer what you like, lower ok.  I did 2001, significantly lower.  Very rude message back from seller via agent.  I thanked them politely.  A week later same offer, in writing, via solicitor.  Accepted.  Sold in 2 years ago.

comeandgo

So houses are selling at about 20% over value so you will have to look at what’s on market around £100k to £120k or you could buy a new build.  They are usually sold at amount valued.

onylon

You can't afford to complete for the most popular places so you need to wait while you get a bigger deposit together or change your approach. Look for properties not marketed as offers over, consider a wider search area and less desirable properties. Be prepared to overlook cosmetic issues etc.

I'm sure local estate agents can help to point you in the right direction.

MeticulousMark

Hi there,
           We were in the same situation as you, same budget and in Edinburgh just over two years ago. A few options - 

Speak to a mortgage broker to see if you can get a 5% mortgage therefore meaning your deposit goes further (we had saved for a 10% but only using half as the deposit essentially increased our budget from 120k to about 150k). Makes very little difference in terms of your mortgage as you just get a 2 year fixed and then remortgage after two years on to a better rate.
Look for houses that are fixed price (very few but that's what we got, for 150k (home report value 160) - the person wanted a quick sale. 
Look for cheaper houses

In saying all that, we were only looking and were 42 days between viewing the place we bought and moving in - Edinburgh market moves fast and you need to be ready to jump when you see an opportunity. 

Hope that helps!

MeticulousMark

* we were only looking seriously for two weeks, then were 42 days between viewing the place we bought and moving

fewcloudy

Nurse_in_need said:

Hi all,

I'm looking for some advice on buying in Scotland, in Edinburgh to be precise. I am looking at properties for around £120k - 150k. I have a mortgage in principle agreed for up to £148k and I have 10% deposit saved up.

I'm having an annoying and reoccuring issue - say I see a property advertised as 'offers over £120k' with a valuation of £130k. Most places are going for £20 - 30k over valuation at present. Because it's over the valuation that amount needs to be paid in cash, as the mortgage won't cover anything above the actual value. So for a place with a valuation of £130k but selling for £150k, I would need £15k deposit plus another £20k in cash, £35k total for a place costing £150k! I'm finding this system totally insane and wondering if anyone had any ideas on what I could do? I was thinking that a 10% deposit would be enough but just now it's looking like I might need at least double that?

Also, im not eligible for first time buyer deals or shared equity schemes.

Any ideas anyone?

You need to look at houses that are for sale at a lower price than you currently are. Maybe more like O/O £100-120k, as someone else said.

It's not an insane system, but it is different to what you are perhaps familiar with. Many of those with experience of buying in Scotland and England prefer it. But neither set up is perfect, and both have elements that you really need to understand.

It might seem unlikely today, but there have been numerous times over the years when the majority of properties for sale have been marketed at Fixed Price (which is what you really need just now).  At other times it has been a mix of Fixed Price and Offers Over.

And, unfortunately for you, right at this time in a housing boom in Edinburgh, almost everything is Offers Overs.

sheramber

I bought in Edinburgh 6 months ago and had to pay £25k over home report price.

My son sold his flat last week and accepted an offer of £20k over home report price.

theoretica

Worth asking your mortgage broker if they know of any which may run their own valuations higher than the home report one - but you would then need to make the offer subject to valuation which might not be attractive to the seller.

jemima82

Same advice as above really - I saved £20k to buy a property in Ed at £132,000 (O/O £120k, Home Report Valuation £125k).

I bought on my own with no government schemes on a 10% deposit and 30 year mortgage.  You need to either look at lower value properties or save up more money I'm afraid.  I know how frustrating it is, but it is possible!