Buying and selling houses

I actually would not change it. When you buy a house it is by far the largest purchase you ever make and often accompanied by a huge mortgage. Anything in the process that means the potential purchaser has every opportunity to rethink their decision should be left.

There could be some co-ordination of some of the needs and requirements, but otherwise I think it should not be changed.

Every one goes on about the wonders of the Scottish system, but it is fine for the final purchaser and seller, but it can prove very expensive for unsuccessful purchasers who will have shelled money out on surveys and other checks, ahead of their unsuccessful bids. I have heard of some people being £10,000 or more out of pocket before they succeed in being the successful bidder.

Also more people are opting out of the traditional Scottish system to sell their house on the open market, as in England.

My sister was a victim of the Scottish system and did indeed shell out a great deal of money on unsuccessful bids. Finally in desperation making a massive bid above the offer price just to secure a property.

I listened to the programme and a lot of the information about Scotland was totally.
In a Sellers' market (which it is now) property prices are hugely inflated and buying is a total lottery.
Houses in Scotland are sold on the open market, in a Buyers' market they may sell at fixed price rather than offers on but this is rare.

#totally incorrect

We have bought in Scotland and it was a far simpler system. Houses for sale come with a home report and valuation from a surveyor, paid for by the seller. It gives the seller opportunity to put rights any defects if they wish to. No further survey is required, unless the buyer requires a specific one.
The prospective purchaser instructs their solicitor to put forward an offer, which might be a closed bid. A good solicitor will know how much % the ‘offers over” need to be.
Once the Missives are done (searches) then it’s plain sailing, no gazumping or pulling out.

Presumably you were able to offer enough right away to beat the other bidders.

I was very sorry for my sister as bid after bid failed.

The home report of the house she finally secured omitted several sues she discovered later. It is of course commissioned and paid for by the seller so the surveyor is working for them, not the buyer.

Not all properties go to sealed bids, only if several ‘Notes of interest’ are submitted by prospective buyer’s solicitors. Our solicitor did not charge for this service. Notes of Interest allow a prospective purchaser to know if there are other offers and if it will go to sealed bids. Obviously not the amount of any other offers.
The Hone Report is carried out by a professional surveyor who has to be independent. Ours identified Asbestos, we then had our own specialist survey.

Lathyrus3

Presumably you were able to offer enough right away to beat the other bidders.

I was very sorry for my sister as bid after bid failed.

The home report of the house she finally secured omitted several sues she discovered later. It is of course commissioned and paid for by the seller so the surveyor is working for them, not the buyer.

Scottish houses usually go to a closing date so anyone can bid (through their solicitor) - the seller picks their favoured bid (the highest bidder doesn't always win). In a Sellers' market houses can sell far in excess of their valuation.
Home Reports are incredibly basic and often the mortgage company will ask for their own report to be done.
I've bought and sold both in England and Scotland.

Having bought and sold houses six times. most recently in July and August each year, plus DD doing the same and all I can say is that any problems and hassles have been caused by the behaviour of buyers and sellers, quite outside the legal negotitations.

The house DD was buying was tenanted. She was six weeks into negotiations before she was told that it was a fixed term tenancy and the tenant wouldn't be moving out for 9 months.

We had a seller who was utterly intransigent on everything. The price was non-negotiable. She wasn't bothered how long it took to sell the house provided she got her price. She then demanded six weeks between exchange and completion and stuck to it no matter how much we protested.

The legal negotiations etc went very well. But the 2 sellers meant DD had to wait nearly a year to exchange and complete and we had a 2 month hiatus between selling and finally buying.

M0nica

I actually would not change it. When you buy a house it is by far the largest purchase you ever make and often accompanied by a huge mortgage. Anything in the process that means the potential purchaser has every opportunity to rethink their decision should be left.

There could be some co-ordination of some of the needs and requirements, but otherwise I think it should not be changed.

Every one goes on about the wonders of the Scottish system, but it is fine for the final purchaser and seller, but it can prove very expensive for unsuccessful purchasers who will have shelled money out on surveys and other checks, ahead of their unsuccessful bids. I have heard of some people being £10,000 or more out of pocket before they succeed in being the successful bidder.

Also more people are opting out of the traditional Scottish system to sell their house on the open market, as in England.

@MOnica Every one goes on about the wonders of the Scottish system, but it is fine for the final purchaser and seller, but it can prove very expensive for unsuccessful purchasers who will have shelled money out on surveys and other checks, ahead of their unsuccessful bids

No, they will not. .

In Scottish property sale, by law, the seller must obtain an independent survey and valuation with every building detail specified by the legislation. The survey is done by an independent surveyor, and it is then made available to every viewer at no charge.
One property, one survey.
The seller and all viewers are on the same playing field from the word go.



IF there is anything in his survey that requires an indepth specialist investigation , the surveyor must say so.

So far no prospective bidder has paid a penny. If they decide to bid, they can make their offer SUBJECT to further specialist investigation ) . My lawyers contracts, are also subject to successful bid. IOW, they don't charge me for preparing and presenting my offer. Unless its accepted.

Yes, its true that in the Scottish closing date system, only one buyer gets the property and the rest are disappointed, But that's exactly the same in England. The difference is, in Scotland, the making a failed offer has cost nothing. Plus, the seller and buyer's lawyers are now working on the agreed price and deal, with a tried and tested conveyance format.

I've bought and sold properties in both England and Scotland
and find the Scottish system cheaper and fairer. Less time wasted, no money wasted.

Lathyrus3

Presumably you were able to offer enough right away to beat the other bidders.

I was very sorry for my sister as bid after bid failed.

The home report of the house she finally secured omitted several sues she discovered later. It is of course commissioned and paid for by the seller so the surveyor is working for them, not the buyer.

In Scotland, each intending buyer submits a "letter of interest" from their own lawyer to the sellers lawyer.
They are all entitled to know how many LOI's there are, so each buyer knows how many others are interested , how much competition they face.

The survey valuation, and the sellers " for sale price " are the start line. The seller (and buyer) in Scotland both expect the property to sell for more than the asking price.

No messing about with "cheeky offers" below the asking price.

I have bought two houses in Scotland (in a Buyers' market) by making cheeky wee offers below valuation, I was also the first (and only viewer) as l made an offer that immediately took it off the market (not all properties go to a closing date).
I also received a cheeky offer on a property l intended to sell but hadn't yet marketed - but too cheeky in that case.
The housing markets in Scotland and England are far from straightforward.

I take on board what’s been said about the sellers survey. It was many years ago that my sister bought, and subsequently sold later, in Scotland.

I still don’t like the sealed bids thing, where you have to make a guess at what others are offering. Desperate people, like my sister, end up offering thousands more than the next lowest, out of desperation to secure something.

butterandjam why do so many people using the Scottish system complain about how much unsuccessful bids cost them?

I suspect people do not trust sellers surveys, that plus mortgage lenders require surveys to be done before they grant a mortgage and you need to have an assured mortgage incase your bid is successful.

We could do with the Scittish system.

I like the idea that when you make the offer and it is accepted that it is legally binding. I was once selling a property and I had 3 separate people make an offer one day and once I accepted suddenly pulled out without explanation. Fortunately, none of the legal work had been done but the final buyer strung me along for months before suddenly insisting at the last minute the price be dropped significantly before they would exchange. I was devastated but felt cornered because the house I was buying was going to fall through and I would have had to still pay the solicitors fees.

MOnica...news to me about Scotland!

Buyers and sellers in England should be required to place a deposit of say 0.5% of the agreed purchase price with a solicitor that is paid to the other party in the event of one of them pulling out after an offer has been accepted .

ArthurAskey

Buyers and sellers in England should be required to place a deposit of say 0.5% of the agreed purchase price with a solicitor that is paid to the other party in the event of one of them pulling out after an offer has been accepted .

What happens if you do what we did and pull out on the offer being accepted? No money was spent by either of us. No solicitors even informed - there wasn't time.

The reason we did this was because there was another house tha we really, really wanted ever since it had come on the market 18 months previously, but our house had also been slow to sell in a poor market and it went under offer a few days before our house sold.

We kept in touch with the estate agent, as previous offers had fallen through and just before we made an offer on another house, we double checked with the agent who told us that exchange was expected to take place within the week and this sale was secure.

So we offered on the other house. As the phone call came through that our offer was accepted an email came through to say out of the blue the sale of the house we really wanted had fallen through. The buyer had tried to gazunder the seller and she had told them to get lost and they had pulled out.

We immediately withdrew the offer for the alternative house and offered on the one we really wanted and had wanted for so long - and we are living there now. As I said, no money was spent on either side, only disappointment on the sellers side, which we acknowledged.

I can see the advantages of the Scottish system as, once accepted. offers are more secure. However I think that it must push prices up significantly as I gather you have to offer more than valuation in many cases. I don't know how mortgage companies would deal with this, as they obviously can't lend more than valuation?

cc

I can see the advantages of the Scottish system as, once accepted. offers are more secure. However I think that it must push prices up significantly as I gather you have to offer more than valuation in many cases. I don't know how mortgage companies would deal with this, as they obviously can't lend more than valuation?

The seller may not always accept the highest bid, as bids are in a format that includes buyers financing, such as cash or relying on a mortgage and readiness to proceed.
I would imagine that the majority of houses in Scotland require a mortgage and still sell with the bid system. However, I don’t know as we paid cash for ours.

We once had to pull out of a sale because our buyers were having problems with their buyers and we could see no end in sight.

We gifted them the money they had spent on the survey and solicitor which we thought was only fair. Perhaps some sort of liability for expense incurred?

It wouldn’t work with the Scottish system obviously but then the situation wouldn’t occur. There has to be be a better way but I don’t like the sealed bids. I think it’s potentially open to abuse.

ArthurAskey

Buyers and sellers in England should be required to place a deposit of say 0.5% of the agreed purchase price with a solicitor that is paid to the other party in the event of one of them pulling out after an offer has been accepted .

Where we have lived {all over the world} it is 10% so everyone is very careful before even putting in an offer. 10% is often a sizeable sum. Well done AA for a sensible answer

CountessFosco

ArthurAskey

Buyers and sellers in England should be required to place a deposit of say 0.5% of the agreed purchase price with a solicitor that is paid to the other party in the event of one of them pulling out after an offer has been accepted .

Where we have lived {all over the world} it is 10% so everyone is very careful before even putting in an offer. 10% is often a sizeable sum. Well done AA for a sensible answer

Presumably this would be after a survey had been done.