Understanding the 'Offers Over' System in Scotland: A Guide for Buyers

Posted by HSPC on Tuesday, 04 February 2025

The "offers over" system is a defining feature of the Scottish property market, and it often takes new buyers by surprise. Unlike fixed-price sales, this approach involves competitive bidding, requiring buyers to strategically navigate the process to secure their desired property. Here's a detailed look at how this system works and how to approach it effectively.

What Does "Offers Over" Mean?

When a property is listed with an "offers over" price, this indicates the minimum amount the seller is willing to accept. However, this is just the starting point, as buyers are generally expected to bid higher than the listed price. The exact amount to bid depends on factors such as market conditions, property demand, and the valuation provided in the property’s Home Report.

The Home Report, a mandatory document in Scotland, includes:

  • A property valuation, which gives an estimate of the market value.
  • A survey of the property’s condition, which may influence your willingness to bid higher or lower.
  • An Energy Performance Certificate (EPC), which assesses the home’s energy efficiency.

This system provides transparency by offering buyers essential insights into the property before they submit an offer. Still, it requires careful planning and research to decide on an appropriate bid.

Making an Offer

The process of making an offer in Scotland differs from other parts of the UK, and it requires preparation and strategy. Here's how to approach it:

  1. Research Comparable Sales

Look at recent sales of similar properties in the area to gauge the market. This can provide a baseline for how much you might need to bid above the "offers over" price. Consider factors such as the property’s size, condition, and location when comparing.

  1. Consider Competition

In highly sought-after areas or for particularly desirable properties, offers can significantly exceed the asking price.

  1. Budget for Extras

Beyond your bid, factor in additional costs such as:

  • Land and Buildings Transaction Tax (LBTT): This is a property tax that depends on the purchase price.
  • Solicitor Fees: Covering the legal work involved in buying a property.
  • Survey and Repair Costs: If the property needs renovations, include these in your budget.
  • Mortgage Expenses: Account for any arrangement fees or interest rates associated with your loan.
  1. Work with a Solicitor

In Scotland, a solicitor must submit offers on behalf of buyers. Your solicitor can provide guidance on crafting a competitive yet realistic offer, considering the Home Report valuation and market trends.

The Role of Closing Dates

In cases where a property attracts significant interest, sellers may set a closing date. This is a deadline by which all interested buyers must submit their offers. Here's what you need to know:

  • Sealed Bidding: Offers are submitted confidentially, and buyers typically do not know the details of competing bids. This creates a fair process but also requires buyers to submit their strongest offer upfront.
  • Finality of Offers: The seller’s solicitor reviews all bids and selects the one that best meets their criteria, which may not always be the highest offer. Factors like flexibility with the move-in date or having financing secured can also influence the seller's decision.
  • Quick Decision-Making: Once a closing date is announced, buyers must act fast to finalise their offers. Ensure your finances are in order and your solicitor is ready to submit your bid promptly.

Tips for Buyers Navigating the "Offers Over" System

  • Work Closely with Your Solicitor

A knowledgeable solicitor can help you navigate the nuances of the "offers over" system, ensuring your offer is competitive while protecting your interests. You can find a list of our local solicitor firms on our website - https://www.hspc.co.uk/solicitors.asp

  • Use the Home Report Valuation as a Guide

The Home Report valuation provides a helpful benchmark, but it’s important to consider current market conditions. In a seller’s market, properties often sell for well above their valuation, especially in urban centres or areas with limited supply.

  • Be Prepared for Disappointment

It’s not uncommon for buyers to lose out on properties, especially in competitive markets. Have a backup plan and remain patient as you continue your search.

  • Consider Timing

The time of year can influence competition and prices. Spring and early summer tend to be the busiest periods for property sales, while autumn and winter might present less competition.

This system, combined with Scotland’s unique conveyancing process, makes the property market more predictable and reduces the risk of deals falling through at the last minute.

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