House sellers in Scotland traditionally advertise their property for sale at “Offers over”. This sets up interested buyers to compete to purchase the house. But how does the Offers over practice work and, importantly, how much over the asking price should you pay?
Anyone who has been trawling the market looking to buy a new house will be familiar with the “Offers over” method of marketing. This is where the seller tries to maximise the sale price achieved by putting potential buyers in a competitive situation. We are currently in a sellers’ market which means that the number of people looking to buy a house now far exceeds the number of houses on the market. This means the normal rules of supply and demand apply forcing the price of houses up – and, in some areas, to record levels!
When a seller puts their house on the market, their agent will discuss the marketing strategy. In a seller’s market, their estate agent will recommend that the property be advertised at an Offers over price. The initial asking price is determined by the estate agent’s experience of the local market, comparisons with other similar properties in the locality and the surveyor’s opinion of value in the Home Report. The asking price is set and the house placed on the market on an Offers over basis.
When enough potential buyers have viewed the property, the seller’s estate agent will set a closing date on which offers are to be received. It’s then up to the buyer to decide just how much to offer.
There are a whole raft of things to consider when deciding on the offer you wish to make. Importantly, please ensure you ask your solicitor to intimate your interest to the selling estate agent. By doing that you will ensure that you are told about any closing date the seller sets.
When considering how much to offer, there are three key factors to take into account.
The first, and, perhaps, the most basic is what does the surveyor think the house is worth. In a competitive market, you need to be prepared to offer more than that price.
The second factor you must consider is how much you are actually prepared to pay. This gives rise to an even wider range of things to consider which includes the condition of the property and any improvements you’d like to make.
The third thing to think about is what about the sale of your own house. Have you sold, how much cash will be available after repaying your mortgage and when does your sale complete?
These three factors will give you a baseline on which to formulate your thinking.
Once you have reviewed these, the best advice we can give you in a competitive bidding situation is to offer as much as you can comfortably afford to pay!
Please do not hesitate to contact us should you require additional advice.