Property prices in Scotland are often shown as “offers over”, “offers around” or a fixed price.
These phrases describe how the seller is marketing the property, but they do not tell you exactly what the seller will accept.
If you are new to the Scottish buying process, “offers over” can be one of the most confusing terms. Here is how it works and what you should consider before making an offer.
What does “offers over” mean?
An offers-over price is normally the starting point from which the seller hopes to receive offers.
It is not a guarantee that the property will sell above that figure, and it should not be treated as the property’s formal valuation.
The Home Report contains a survey, an energy report and a property questionnaire. The survey includes the surveyor’s valuation of the property.
Your solicitor, mortgage adviser and lender can help you understand how the asking price, Home Report valuation and your available funds relate to one another.
Start with the Home Report
Read the Home Report before deciding what you are prepared to offer.
Pay attention to the valuation, the condition categories in the survey, any alterations mentioned in the property questionnaire and recommendations for further investigation.
Your lender will usually base its lending decision on an accepted valuation rather than simply the price you offer.
If you offer more than the amount on which the lender is prepared to lend, you may need to cover the difference from your own funds. Take advice on your individual circumstances before committing to an offer.
Ask your solicitor to note your interest
When you are seriously interested in a property, tell your solicitor.
They can formally note your interest with the seller’s solicitor. A note of interest does not guarantee that you will be invited to offer, and it does not commit you to buying. It lets the seller know that you may wish to proceed.
If several buyers note their interest, the seller may set a closing date. This is a deadline by which written offers must be submitted.
If no closing date is set, your solicitor may be able to discuss an offer with the seller’s solicitor instead.
Decide what the property is worth to you
There is no universal formula for deciding how much to offer.
Recent comparable sales, local demand, the Home Report, the condition of the property and the level of competition may all be relevant. Your solicitor can advise on the local process and any evidence available.
Set a limit that reflects your finances as well as your interest in the home.
Remember to allow for Land and Buildings Transaction Tax where applicable, legal fees, moving costs and any work you expect to carry out.
A mortgage agreement in principle can help you understand your possible borrowing range, but it is not a final mortgage offer.
Price is not the only part of an offer
A formal offer can include:
- The price you are offering
- Your proposed date of entry
- Items you want included in the sale
- Conditions attached to your offer
A seller does not have to accept the highest offer. They may consider the buyer’s position, proposed timings and conditions alongside the amount offered.
Your solicitor will prepare and submit the written offer for you. Avoid making informal promises directly to the seller, as these may not reflect the terms of the formal offer.
What happens after an offer is accepted?
An accepted offer is followed by an exchange of formal letters between the solicitors. These letters are known as missives.
The terms may be negotiated before the missives are concluded. Once they have been concluded, the contract is binding, so take advice from your solicitor throughout the process.
Your Move can help you find the right property and keep communication moving between the parties, while your solicitor handles the legal offer and conveyancing.
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This article is a general guide and is not legal, tax or mortgage advice. Speak to a solicitor and mortgage adviser about your circumstances.
The Your Move Content Marketing Team
