In This Guide
Apply for a mortgage
Buying at auction
Buying in Scotland
1. Overview of the process
2. Pre-offer process
3. Making an offer
4. Post-offer settlement
Conveyancing
Find and view
Negotiate
Plan your purchase
Success and failure
Surveys and valuations
To buy or not to buy
Buying in Scotland
Making an offer
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The process of making an offer differs quite considerably in Scotland to that which takes place in England and Wales.
In England, the seller gets the property valued by several estate
agents and will often set the asking price at, or marginally above
the highest valuation. They will usually expect the buyers to
come in with offers below the asking price. To Scottish people,
this must seem like a backwards way of doing things.
In Scotland, the seller will, in consultation with his or her solicitor, set a price and invite offers over and above that price. This is known as the upset price. This is the minimum price at which an offer is likely to be considered. Most properties do not get sold for less than the upset so it is not usually worth submitting an offer at a lower level, unless the property is proving difficult to sell. It is not uncommon in times and areas of high demand for a property to be sold for ten, twenty, or even thirty percent more than the asking price.
If there is more than one party who notes interest in the property,
the selling solicitor will fix a closing date and time - the deadline
by which all offers must be received. If your offer is not with
the seller's solicitor by this time it will not be considered.
When there is competition for a property, you will probably only get the chance to make one offer. It is a bit like a game of poker, or the bidding process for television rights. You do the groundwork and your research into the value (provided by your opinion, the valuation and the consultation of your solicitor) and you put in your sealed bid without knowing what the other players have tabled.
It is a game where you will probably only get one shot. The seller usually gets an offer over the asking price and accepts it. However, they are under no obligation to accept any of the offers that are made to them and they can reject them all and open up the competition again. This rarely happens, so don't plan for it.
Your solicitor will probably help advise you on your offer. Assess
and analyse the valuation and check the prices of similar properties
in the area if there are any. Think about how much you can really
afford and whether the property represents good value at that
price. Is somebody likely to make an offer higher than you? Would
you be able to match it? Would that be wise? You don't want to
miss out on the home of your dreams for the sake of a few extra
quid, but then again, you don't want to overstretch yourself needlessly
and make an offer way higher than the competition. One common
technique is to make an offer slightly above a round number, in
order to try to fend off any close competition. Instead of offering
£145,000, for instance, you may offer £145,101.
Your offer should also include the date of entry - the day and month on which you pay for the property and receive the keys - and details of any extras which are to be included, such as carpets and curtains.
On the closing day at a pre-specified time, the seller and his
or her solicitor will open the offers and decide which to accept.
Most people accept the highest offer, but the other factors can
sometimes sway them one way or another. For instance, they may
be very keen to get the funds in place and move out quickly, so
the entry date could become an important factor.
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