Dealing with the "offers over" system

It's, er, interesting up here in Scotland what with the "offers over" system for property. How does this system work exactly?

From what I've seen, the offers over price is not really what the house will go for. Is there a standard, like if they think the house will sell for £150,000 that they'll knock off 10% and say offers over £135K?

Also, what's the process for actually bidding? Back in the US, you'd work through your realtor to put in a bid, and do inspections beforehand. Is it the same here, or do you have to go through a lawyer/solicitor?

How much can one expect bidding on a house (in the £150K range) to cost between inspections and such?

Thanks much,

Clarelynn

 

Hiya
I'm in the property buying process as we speak.. So am in the middle of dealing with the offers over system.. Been searching for about two months now.. I've offered on several properties but not been able secure them so far.. So i've just  today as a matter of fact put a offer in on a property i THINK i might have a chance one..
I've found and been told that if its advertised at offers over say.. £75,000 you can expect to pay at least 15 to 20 % over that to secure it..
Recently i offered £75,000 on the closing date  for a property that was on the market for offers over £69,000 the the seller then decided that they wanted to go to a set price of £77,000 which even tho only £2000 more its outta my price bracket..
Another i offered on the closing date was on the market for offers over £63,000 I offered £70000 and was fourth out of 5 people on that one.. Sooo if you see a property you really like be prepared to pay up to %20 plus over the offers over price..
It is absolutely crazy but its a sellers market just now..
Of course the best is if you find a fixed price property in your price range and are the first to get your offer in.. But there aren't many of those here in Scotland.
To note interest and place a bid you go through a solicitor. Noting interest keeps you notified if the property goes to a closing date or is about to be sold. That way you know you have to have your offer in to your solicitor before the closing date.
Hope that helps a bit.. I have found the whole process VERY confusing and FRUSTRATING to say the least..

Hi, Kaylesh,
That's really helpful. Wow 20%? That's a _huge_ difference. Yes, it IS a seller's market, isn't it?

OK, so if you browse the internet and see a house you like, go visit and still like it, how do find a solicitor to work with? And do they charge something for noting interest? How about for putting a bid in, or do they get a percentage of the final sales price like realtors back home?

If you do get lucky and find something with a fixed price, do you still work through a solicitor in the same way, or is the process simplified somehow?

Best of luck with this latest offer. Hopefully all the experience you've gotten so far will stand you in good stead. Fingers crossed for you!

Clarelynn

Well the solicitor i am using is used by the agency i am getting my mortgage through.. He is one of the solicitors that they use.. Sooo thats how i found him..
once i've seen a property that i've wanted to see by surfing the net i call the agent representing that property for a viewing. Then assuming i still like the property i let my solicitor know that i want to note interest or give a offer..
I've not dealt with any fixed price properties YET.. ..... but as far as i'm aware all offers go through a solicitor which really is best as it protects you the buyer..

20% over the 'offers over' price is pretty much standard for the Edinburgh area.   
The good news is that you dont have to pay to 'note interest'.
The bad news is that most people (if they are serious about the property) , get a survey done... which of course costs a couple of hundred.
But if your bid is not the winning bid, then you lose that money.

We paid for surveys for 4 different houses before we finally got our bid accepted on one!

20% over the 'offers over' price is pretty much standard for the Edinburgh area.   

depending on the location, you can expect 30-50% in some, certainly non-isolated cases.

10%?  no way.

fixed price can work as stated, but people can and do still offer over the fixed price offer if they really want the property.

We paid 26% over the asking price here in Inverness.  It's common.  When we were buying, we were outbid on 5 properties before we got this one.  It is frustrating to say the least.  We did place one bid without getting a survey, but the bid was 'subject to satisfactory survey'. 

Wow, what an eye-opener this all is.
So, with such a huge range (20-50%!), how on earth do you decide how much over the "offers over" to go? Will the realtors be able (and willing to) share info on what's appropriate for that region, that city, etc.?

Also, how much can one expect a survey to cost? And do you just do one survey, or are there multiple things that equate to, in the US, a home inspection, septic inspection, roof inspection, etc.

And how much can one expect a solicitor to charge for putting your bid in? Is it a standard fee, a percentage of the house price, or something else?

Thanks for all the great info!

Clarelynn

You just get 1 survey, but it's up to you (and your bank account!) how much detail you want it to go into...  there are different levels of the survey, from absolute basic, which simply states the value of the property on the open market and not much about its condition. 
Then theres a homebuyers survey, which gives an indication of repairs likely to be required in the near future, and then theres the building survey, which is really in-depth (and expensive).

Exact costs vary, but a basic survey is normally around £250.   A homebuyers report is around £500, and... the building survey?  God only knows... probably around £1000.

And how much can one expect a solicitor to charge for putting your bid in? Is it a standard fee, a percentage of the house price, or something else?

Theres no cost to the bidder for putting in a bid.

There are sites out there where you can look up prices of recently sold houses to see what other people have been paying for properties in that area.  I don't know them off the top of my head, but will try to root around for them. 

Your solicitor may give you a bit of guidance, but you have to decide how much you are willing to pay for a property.  It is a bit of a nightmare.  We were outbid on 2 properties by less than £200. 

Our solicitor only started charging us for placing a bid on our last (of 5) offers.  Then I think it was £60 for writing up the official offer. 

Well the two I've been using are
www.nethouseprices.com
www.ourproperty.co.uk
You need either the post code or the street address it gives a good idea of recent houseprices as well as what the property that you are going for sold for prior to the current owner as well..
Kay

Our solicitor only started charging us for placing a bid on our last (of 5) offers.  Then I think it was £60 for writing up the official offer. 

oh sorry Kathleen... i had no idea!
(Never been charged for this before!!)

I'm intrigued by this offers-over thing they do in Scotland.  I have seen it on a few properties in England but they tend to be mansion-house million pound + homes.

First question, if you would never in a million years even see a property go for 5-10% over the price why doesn't everyone just bump up their listing prices by 20%??  What's the point in putting it so low if no one would ever sell theirs for that?  Just seems like a lot of faffing around to me.

In England, when yout put an offer in on a house, the agent will tell you that there's been other offers for higher and whether you'd like to raise your offer.  Do they not allow this in Scotland?  I mean, if you're not sure how keen people are to buy a place but you really love it you should have the chance to raise your offer.  Does this not happen?

Gazumping is illegal in Scotland, when you accept an offer it is legally binding. So you can't turn round and accept a higher offer.
The seller will usually set a date for bids to be in by, and then if more than one is received they can decide which one to accept.