That’s basically manipulating the price which will drive prices in that particular area up, can’t be allowed surely?

That’s basically manipulating the price which will drive prices in that particular area up, can’t be allowed surely?

Allowed? I think it’s encouraged!

Completely standard practice. The agents know what houses are selling for and push buyers in that direction. That is essentially their job after all, to get the best possible price for the seller and their subsequent commission.

We’re on the southside of Glasgow in what is regarded as the best catchment in the country – prices are nuts and continually increasing.

Dunblane begs to differ… 😉

That’s basically manipulating the price which will drive prices in that particular area up, can’t be allowed surely?

Is that not how it has always been unless you are in Soviet housing?

Both were clear that is not the behaviour of buyers – apparently buyers love some bidding up action and FOMO of a Best and Final process…

I can confirm that this is inaccurate at best.

I can confirm that this is inaccurate at best.

I agree. I was trying to be ironic, but it doesn’t come out on text.
I found it fascinating that is what the estate agents both thought.

Under the Scottish system, it means people with loads of cash to play with, can massively outbid people who’ve just managed to save up enough for just a deposit based on X% of the home report valuation. It means those on low incomes and/or the young have even less chance of getting on the property ladder

This exactly how in works in England also, people with loads of money can offer more for the house they want regardless of its advertised price.

Under the Scottish system,

It certainly sounds “not worse” and I’d go so far as to say potentially better for everyone. One of the biggest problems is that low valued stuff doesn’t make it to market in England, it’s valued low* and “mates” are informed and it sells for a touch over valuation to a developer/buy to let type before it gets listed.
Result being there’s very few low cost homes available to “the general public”
At least the system in Scotland means this is much less likely.

*I’m “sure” this would never be below market rate as that would probably be illegal.

There’s also bugger all negotiation here.

My last buy and sale both involved a bit of negotiation. It can be “here’s an offer, do you want to accept it or hope to get more before we find somewhere else?”

This exactly how in works in England also, people with loads of money can offer more for the house they want regardless of its advertised price.

It’s not the same though, because as someone pointed out in England your mortgage valuation is then generally matched to the sale price.

So if you have a 80%LTV mortgage offer and want to buy a house for £200k with a £40k deposit, you go ahead and do that.

In Scotland you look at a £160k house, put in an offer of £200k, but can only get £128k as a mortgage, and have to find the extra £32k yourself as the bank only takes the valuation in the sellers survey.

In Scotland you look at a £160k house, put in an offer of £200k, but can only get £128k as a mortgage, and have to find the extra £32k yourself as the bank only takes the valuation in the sellers survey.

Putting the ‘risk’ on the folk with the money rather than the Bank (and the rest of us).

It certainly sounds “not worse” and I’d go so far as to say potentially better for everyone. One of the biggest problems is that low valued stuff doesn’t make it to market in England, it’s valued low* and “mates” are informed and it sells for a touch over valuation to a developer/buy to let type before it gets listed.
Result being there’s very few low cost homes available to “the general public”
At least the system in Scotland means this is much less likely.

*I’m “sure” this would never be below market rate as that would probably be illegal.

Whilst it’s probably possible to do something like this if you wanted to swap two properties and avoid stamp duty or something. Who are these nerfariouis yet benevolent people selling property at below the market rate to their mates?

I agree. I was trying to be ironic, but it doesn’t come out on text.
I found it fascinating that is what the estate agents both thought.

I was trying to agree with your irony, but I think I suffered the same problem!

You’re absolutely right though, although I wonder if it’s what they actually thought or if it’s just what they were telling you to help you feel less guilty about the absolute emotional rollercoaster about to ensue for your prospective buyers.

I moved (in England) at the start of last year, and 2021 was a stressful time not helped by three buyers pulling out once an offer had been accepted. I don’t have many thoughts on how to improve things but in my opinion that should be outlawed and any thing that helps prevent that would be an improvement,

Still think the conveyancing is the biggest issue across the UK, how in this day and age it takes so long to do, especially if there was a linked database, it just makes a mockery of the whole thing, and opens up things like gazumping, failing chains, etc. If it wasn’t a self sustaining industry, the government might actually try and fix it.

Who are these nerfariouis yet benevolent people selling property at below the market rate to their mates?

“below” market value? That would be the estate agents who get a nice kick back from the developer at the end of the month so value the house low.

Most local estate agents will know the same developer(s) well and all of whom know they want 2 bed houses, these post codes and for <180k

All of them tell you about 170 then have a cash offer by mid afternoon rather than 185 and letting it go to market. Low sales prices in the area keep the valuations deflated so the next house and the next all get the same.
If they went to open market they might actually sell for £190, then £200 etc etc.

There’s nothing benevolent about it, they diddle the seller and push more and more reasonably priced housing into rental.

It’s not about avoiding stamp duty, it’s about maximising profits by minimising competition.

Still think the conveyancing is the biggest issue across the UK, how in this day and age it takes so long to do, especially if there was a linked database, it just makes a mockery of the whole thing, and opens up things like gazumping, failing chains, etc. If it wasn’t a self sustaining industry, the government might actually try and fix it

It’s what my missus does for a living. Absolutely archaic, antiquated industry. Ground to a halt at the start of covid as they still rely on paper physical copies of so many documents, and the various bodies involved absolutely refuse to move to digital solutions. Painfully slow process and a catalogue of errors from start to finish

Now this is one we have seen fail.
Property ‘sold’ and then someone unable to complete.

Yes – ask a typical solicitor when you are buying and they will tell you its binding and you may be sued if you try to pull out.  Ask your solicitor if you are selling and your buyer pulls out – then is suddenly will be a lot less certain.  “Well you might be able to sue but if he doesn’t have the money to complete the transaction he likely doesn’t have the funds to pay you damages either”!

This is the problem. There’s a huge disconnect between what people are willing to pay, and what surveyors think the property is worth.

This is cyclical, the surveyors take a long time to catch up with the market trends and are looking “forward” as well.  There’s a fair amount of “judgement” in the number they come up with but really they are working for the mortgage company to protect their risk so should be on the lower side.  A property might be worth 20k more to “you” if the decor/kitchen/bathroom are all to your taste or you have a degree of urgency to find somewhere (because you want to move in before school starts, a job move, you have sold your place) or because you have missed so many properties and are getting fed up, or perhaps you have family nearby who will help with childcare, or its walking distance to your job or has space in the garden for a wfh office pod.  The flip side is if “everyone knows” property is usually won at 20% above home report value then if the surveyor tries to catch up with the market, it just sends a message to the buyer its worth even more and if they have access to the cash they may well offer 20% above the “corrected” price.

It’s the same down here now, go into an area that’s desirable, you can be up against a lot of folk with large savings, they can afford to add 20k if it’s getting them near what they want (work, schools, etc), most of us can’t do that and first time buyers are being pushed towards simpler, less desirable homes.

I don’t want to sound like a capitalist boomer – but that’s essentially nothing new.  Markets have always been easier for wealthier folk to access and those starting out have entered at the bottom.

In this instance, if there were multiple offers above say £210,000, then that is the ‘value’ in the market at that time.

In principle yes, but what the surveyor is really being asked to do by the mortgage company is assure them of a price which they could definitely expect to get, he can’t account for the fact that three people are getting carried away and offering too much on this property because next week they might not be there so he’s actually valuing on what rational people would pay rather than the desperate to get it!  Gradually over time their values to drift up to match the true market value – but they don’t want to have overvalued everything and then have mortgage companies complaining when they can’t liquidate the assets.

We had 20% deposit saved up and were still being outbid way above asking, either people must be taking crippling mortgage payments, or selling their own overinflated house is providing enormous deposits on the next

Or people with inheretances or affluent parents giving them a leg up.  They all like to believe that their hard work has helped them help thier kids but really in most cases its just societal inequalities getting reinforced.

Still think the conveyancing is the biggest issue across the UK,

+1
Just antiquated and archaic.
But a bunch of people make a half decent living out of this, so they have no intention of changing.
Particularly in Scotland with our homebuyers pack, the conveyancing could be much much more efficient.
My £550/month rental agreements in Scotland were 32 double sided printed contracts – with a upto £10k for getting it wrong penalty and ‘watched over’ by the council, with exemplar ‘how to do it right’ from the Scottish Government. The same flat was sold with a 2-sided contract…

We just sold our house, offers over £285k, HR £315K and it went for just under £340k.

this didn’t make any sense to me and I was about to ask you what advertise at o/o 285 if the valuation is 315. You presumably would have refused all offers if you only got offered 290. But I think I’ve just worked it out… Lets say I’ve got 330K in my kitty to buy a house. I know that houses in the area I am interested in usually go for 10-20% over the asking. I’ll set my internet search alerts to <300K. The search tool probably isn’t smart enough so say – here’s one just over 300K but fixed price, so some (many?) buyers will miss it. In the personalised world of right move etc there’s no phone call with the agent saying, this one isn’t expecting the usual stupid amount over and so everything looks like its going to be a lot more than advertised, so you have to follow the “norm”. People have already engaged with the property before they see a HR value…

I asked both why we don’t just say it is worth £320 (around what seems right to us) and then the Homebuyers is accurate and buyers can bid around that.
Both were clear that is not the behaviour of buyers – apparently buyers love some bidding up action and FOMO of a Best and Final process…

nobody loves that process except the agents – but I think fixed price creates a different flavour of FOMO. The closing process FOMO lets you have that anxious thursday night conversation where you agree that if you never eat another takeaway and turn the kids school trousers into shorts you can find an extra £3k to offer on the price so you don’t miss out (which is good for the seller), but you generally have a bit of time to think it through and make your mind up etc. But a fixed price property has the FOMO that if you don’t offer right now someone else might beat you to it. That suits sellers who are in a rush, buyers who are scunnered with offers getting rejected, but it needs impulse to win (in a strong market) so I can see that actually buyers aren’t necessarily fans of that either.

Both were clear that is not the behaviour of buyers – apparently buyers love some bidding up action and FOMO of a Best and Final process…

nobody loves that process except the agents

It’s a bit like hand reared fois gras geese queuing up to be fed and this being seen as proof by the farmer that they like it.

Just to loop back on this, we had an offer accepted this morning at just over 20% over valuation.

At least I now don’t have to spend the rest of the summer viewing shitty flats at over inflated prices in dubious hipster locations.

Keep the faith!

Good news

Personally, I would prefer:

Binding contracts when an offer is accepted/buyer to pay a 10% deposit held in escrow.

Higher fees for estate agents (shifts the focus from quantity/price to quality/service)

Independent surveyors who state material facts only (no valuations).

good stuff mr shoes

Thanks all. I’m actually quite excited about it.