New selling style to kill “offers over”

By Michael MacLeod

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.”

£50k cash-back offer on house fails 099

By Douglas Walker 
A DESPERATE house seller who offered a £50,000 cash incentive to the potential buyer of his home is set to take it off the market after receiving no offers.

Malcolm Young, 57, used the ploy in an attempt to lure in buyers after his house failed to attract any interest.

Mr Young is one of many homeowners suffering as a result of the credit crunch which has beset the country.

As a result he has had to shelve his plans of relocating his family to Northern Ireland where he had landed a new job.

Mr Young’s Edinburgh home is a semi-detached stone villa in a quarter of an acre of grounds, with four public rooms and four bedrooms.

It has been on the market at £599,000 but, even with the £50,000 cash back offer, has failed to spark much interest.

Mr Young, a business psychologist, said: “It still has not sold. The offer still stands, but it has not increased levels of interest.

“It’s surprising but it’s obviously related to the fact that all houses are difficult to sell at the moment.

“I’m going to keep it on for a wee while longer and if it does not sell in the short term I will take it off the market and wait and see if the market changes.”

People in homes at the higher end of the market had been largely protected from the worst effects of the credit crunch.

It has been a frustrating time for Mr Young, and his wife Yvonne, 45, as their house has been on the market for several months.

They had planned to go to Northern Ireland with their two young children but are getting used to the idea they will probably be staying in Edinburgh for the time being.

Mr Young said: “It’s one of those things, we’re pretty realistic about it. The disappointing thing is, as I understand it from estate agents, that house prices in Scotland have remained relatively stable, but it’s news from England, where things are worse, that is putting people off.”

Mr Young would be following the lead of many other sellers, who are choosing to sit it out and wait for the market to improve, rather than make concessions.

David Marshall, business analyst at ESPC, said: “Sales volumes in June 2008 are down 50 per cent compared to June 2007 so, while the top end is still performing better than the bottom end, it is not anything like as strong as in previous years.

“We don’t envisage a return to anything like a ten or 15 per cent growth in the short or medium term.”