There’s nothing quite like the excitement of buying your first home. It’s an exhilarating experience, but it’s also very nerve-racking as a first-time buyer. Where do you start? Who do you speak to? How much should you offer? What does ‘offers over’ mean? These are just some of the questions that are undoubtedly going through your mind as you browse the property websites looking for your dream home.
Before you start viewing properties and set your heart on a particular house or flat, you should first speak to an independent mortgage adviser to determine how much lenders are likely to let you borrow and what size of deposit you require. Go one step further and try to pre-approve a mortgage with a lender, that will put you in a much better position to place an offer when the right home comes on the market. That way, you will also know your budget and can start viewing homes for sale within your price range.
Buying a property in a seller’s market
The property market in Scotland is incredibly competitive at the moment because there are many more house hunters than there are properties for sale – this is what’s known as a ‘seller’s market’. For this reason, it’s more important than ever to do your research and seek reliable, expert advice from a local estate agent before making an offer on a house or flat. By doing so, you’ll stand a much better chance of your offer being accepted.
In Scotland, properties for sale are generally marketed at ‘offers over’ or a fixed price. If the seller is asking for a fixed price, you know how much to offer. Sometimes you may be able to make an offer below the asking price – for example, if the property has been on the market for a long time with little or no interest. When dealing with ‘offers over’, however, it’s not such a straight-forward affair.
Making an ‘offers over’ bid on a property
When a property is advertised as ‘offers over’, it simply means that the homeowner is hoping to sell the property for more than the amount stated. To generate more interest and entice competitive bidding activity, the ‘offers over’ price is normally below the Home Report value. However, because the market is especially buoyant at the present time, many properties are selling for more than their Home Report value. This is particularly true in areas such as Glasgow West End and East Renfrewshire, where there is significant competition for almost every property that becomes available.
Before you start viewing potential homes, it’s best to have a clear plan and do your homework. Research asking prices and sold prices of similar properties in the area that you would like to live in – this will give you a good idea of what you can expect to pay, thus how much you will need to offer. If the results seem realistic and suit your budget, start making a shortlist of properties you would like to view.
There are many factors that influence the Home Report value, asking price, and accepted sale price of a property – location, buyer demand in the area, state of repair, school catchment, local infrastructure and planned development, and the speed of sale required by the vendor. Whilst you can research some of these things yourself, a local estate agent is best served to provide the most up-to-date advice. With in-depth knowledge of the area and current property trends, they will be able to give you a clear idea of sale price history and expectations.
Before you start viewing properties, it would be beneficial to have a mortgage agreement in principle. This will demonstrate to estate agents and sellers that you are a serious buyer, and you’ll also be in a position to make an offer when you find the perfect property. As a first-time buyer who is ready to move, you will be an incredibly attractive applicant to many sellers, particularly those hoping for a quick sale.
Strategic bidding and negotiation
When you find your ideal home and want to make an offer, they key is to leave yourself room for manoeuvre whilst sticking within a budget that you can realistically manage. Don’t go in too high with your first bid, otherwise you may end up paying far more than you need to. Most vendors are not expecting to get their ideal price at the start and are usually prepared to negotiate. However, it’s best not to shoot yourself in the foot by offering too low a price, lest you annoy or offend the seller! If there is a lot of interest in the property, the seller may simply dismiss your counter offers in favour of another buyer with a matching or very close bid.
In the event that your initial offer is rejected and the property has not been put to a closing date (this is when sealed bids are invited by all interested parties, with the highest offer being accepted), the seller may come back with a counter offer that would be acceptable. Or they may not give an indication and simply hold out for higher bids from you and/or other potential buyers. At this point, you should speak to the estate agent and ask what the vendor is likely to consider. You can then make a counter offer above your original bid.
It is important to remember that as a first time buyer, you have the added advantage of not having a lengthy property chain – and if you mortgage has been pre-approved – you are a very good prospect for the seller. That might give you some leverage in a negotiation, especially if the owner is looking to sell quickly and without complications.
Once your offer has been accepted, it’s important to keep the momentum going. Ideally, you should have a solicitor lined up to prepare and submit a formal offer. This will include all of the terms and conditions of the purchase – sale price, entry date, fixtures and fittings included in the sale, and title deeds. Your solicitor will communicate directly with the seller’s solicitor to finalise the missives. At this point, the contract of sale is concluded and legally binding. Then it’s time to start packing and get ready to move into your new home!
For sales and lettings in Glasgow and beyond, contact our friendly Vanilla Square team. Whether selling or letting property, you will always be liaising with one of our business partners, which makes our service that much more responsible and approachable. When you instruct us, your property will reach a wider audience as we are one of the few agents who are present on all the major property portals to offer sellers and landlords maximum exposure. If you’re looking to buy, sell, rent or lease your property, or you’re simply considering the idea, contact us by calling 0141 229 0210 or pop into our new office at 711 Great Western Road. One of our partners will be delighted to help and provide you with impartial, expert advice.