One of the key features of the Scottish property market is the blind bidding challenge you have in an offers over closing date. When there is competition to buy a property, the selling agent will invariably set a closing date. They then invite prospective buyers to submit their best offer. Any buyer who is interested then must consider how much over the asking price they are willing to pay. Buyers always face challenges in an offers over closing date.
How does an “offer over” sale work?
When a selling agent takes on a property for a client, they will always look to sell it for the highest value they can achieve. In a busy property market, in Scotland, the property is exposed to the market on an “offers over” basis. This means buyers must consider how much to offer the seller to buy the house.
Invariably, in an offers over situation, there is competition between buyers. To make the competition fair, the selling agent sets a closing date. This allows prospective buyers to submit their best offer. It is a blind bidding situation where none of the buyers who are offering know what the competing buyers are prepared to offer.
It is important to ensure your solicitor “notes your interest” in the property with the selling agents. By doing that, your solicitor will be kept advised of when the closing date is fixed. Your solicitor will also be able to advise you on your offer when the selling agent fixes a closing date.
The selling agent will discuss all offers received with the seller and recommend which offer should be accepted. You should always be aware, though, that it is not always the highest offer that will be accepted.
How much should you pay in an offers over situation?
If only there was an answer to that very simple question!
There are several things you need to consider when trying to decide how much to offer. Four of the most important things to consider are:
- What is the value of the house shown in the Home Report? In the Home Report, the surveyor who prepared the report will give a professional valuation of the property. This is usually your starting point. In a competitive situation, you should be prepared to pay over the Home Report valuation.
- What potential repairs did the Home Report indicate are required now or in the foreseeable future? If there are many different repairs to carry out, you must factor in the cost of those in your deliberations.
- How much do you have available between your own resources and mortgage to pay for the house. When you add up your available resources, there will inevitably be a ceiling. The question is, do you want to go to your ceiling to buy the house?
- Do you have a house to sell? If you do, what stage has that reached. If you are not sure what your own house will sell for, you may be more conservative when offering for the new property. In addition, do you want to enter into a contract to purchase when your own house is not yet on the market or has only just come on and you do not have a firm idea of the timing or amount of your sale.
When you have considered these factors and, usually, a lot more, you will reach a conclusion on what to offer. At this point, the only advice we can give you on price is to offer as much as you can comfortably afford.
Where can you get advice?
We look after our clients’ estate agency and legal needs in Dunfermline, throughout Fife and across Scotland. Our solicitors speak to clients who are faced with offers over situations every day. They can help and support you when you are ready to submit your offer.
If you would like to speak to us or seek out help and advice, please contact us.