THE death of “offers over” signs outside houses could force property prices down, experts say.
Now listing a home for “offers around” a certain price has been tipped as the best way to sell in Scotland.
Radical changes in the way homes are sold kick in on December 1, and leading estate agents Warners reckon today’s common listings styles will die out as a result.
Under new legislation, every property up for sale will have to include a Home Report, which provides an all-inclusive property survey, an energy efficiency report and a seller’s questionnaire.
Bargain hunters will be less likely to consider asking prices above official valuations according to Warners, Edinburgh’s leading property solicitor in terms of property listings, property sales and total sales value in the ESPC for the past nine years.
Instead, the firm expect potential buyers will prefer choosing an “offers around” property as there is more transparency over the figure they would be expected to put their opening bid at.
However, they have stressed that – even at an “offers around” price – the final selling figure for a property could still rise above its Home Report valuation if there is enough interest to spark a bidding war.
Warners has already started listing properties in the Capital at “offers around” and says that it will be recommending the option to more sellers over the coming months.
Scott Brown, Estate Agency Partner with Warners, said: “I believe that, because of this new legislation, we will start seeing a lot more ‘offers around’ prices being introduced and, eventually, this could mean the death of the offers over system that currently exists in Scotland.
“It will make it more difficult for homes to put up for sale at offers over or fixed prices.
“After all, if buyers are going to know how much the property is worth in advance, there’s no point in setting a price that is either well below or above that value.
“For example, if the Home Report estimates that your property is worth £300,000, you are unlikely to get anyone paying significantly over that figure – regardless of the offers over price you set.
“Even if you put the property on at offers over £270,000, it could dissuade prospective buyers, as they will wonder how much you really want to sell for and how far that will be above the valuation given in the Home Report.”
Mr Brown adds that, although offers around has always been an option for property transactions in Scotland, it is rarely used as solicitors have traditionally preferred to set offers over or fixed prices.
However, he believes that the offers around price could encourage more first time buyers to make the first purchase on the property ladder.
He added: “Last year, when the market was at its peak, we had some flats being sold for 25 per-cent more than their offers over price and even now there are some sellers who still expect to achieve similarly high prices.
“However, with an offers around price, you immediately know the region the seller wants for it and can make your bid accordingly.
“If there’s a lot of interest, you may go higher than the value but, if you know there haven’t been many enquiries, you may want to try a price just below the figure.
“For sellers, the benefit is you are setting a realistic price range around the official valuation of your property that is given in the Home Report – and you know that any offers you get will be in that range.
“Because of our system of missives, which ensure every property transaction stands up in its own right, we will always be fundamentally different from the English system – which is open to practices such as gazumping and allows buyers to pull out of a sale without warning.”