Scottish property system

[Mike Mitchell]

Does it kick in 1 (one) millimetre over the border? What if a property straddles the border?

MM

[Owain]

"Mike Mitchell" wrote | Does it kick in 1 (one) millimetre over the border?

Yes, if the border can be established to the mm.

| What if a property straddles the border?

Effectively there would be two separate sales, in two separate jurisdictions, with two separate land registries. There would after all be two separate sets of council tax to pay.

I think.

Owain

[Broadback]

Looking for something else I see that the legal beagles are looking into the Scottish system. I'd always thought that it was superior to our English one, but it seems that estate agents have started to utilise a flaw in it to up house prices. They simply advertise the house as offers over £X when the property is worth at least £2X, there is such a rush for the property that people end up paying £2X+.

[sid]

How would you manage to do that then?

Don't be silly. properties are either registered as Scottish or English. Nobody gets 2 sets of votes, two different postal deliveries, rubbish collections etc.

Don't be silly (again)

[sid]

This has been the case in Scotland for many years. Like any other house purchase its up to the potential buyer to figure out what the property is worth to him/her.

One problem being addressed is the multiple survey. The system is such that the survey must be made prior to a formal offer being made. This can mean 10 or more surveys being made on the same property by the various interested parties (often by the same firm) This can be a costly business if offers are unsuccessful on a succession of properties by an over optimistic bidder.

Seems that a survey is undertaken by the seller and made available to the any potential buyers. This has some drawbacks but the trial is still under way (AFAIK)

I still think that the system of making up your mind time and making a legally binding offer stops most of the abuses of the English system - can't sell my own house etc and the various dodges employed by sellers and buyers to manipulate the price up or down.

[Janet Baraclough..]

The message from Broadback contains these words:

You're completely wrong.

They simply advertise the house as

The Scottish price system works from the bottom upwards; IOW, the price the seller asks is only the bottom "reserve" for a blind auction system. The selling price goes well above that reserve, and the current demand-supply equation has pushed selling prices very much higher above asking price than used to be the case. Nothing to do with estate agents.

No bidder with an iota of sense, ever tells the seller or his agent in advance what offer they are planning to make, so that other bidders can't leapfrog his figure.IOW, there is no way for the agent to artificially "Up the price". Each bidder's offer reflects survey results, mortgage valuations, and what the buyer is willing to pay. He keeps it deadly secret.A date and hour, are set at which all bids must be presented for consideration. The need for secrecy means that many bids are delivered with only minutes before the deadline. They are all opened together and the seller, not the estate agent, selects which bid to accept. Once he accepts, the contract is binding on both parties.

Janet (8 conveyances in Scotland, 4 in England).

[Ian White]

Broadback had written:

The Scottish bidding system is "blind" so there's no way to get into a direct counter-bidding war. What the artificially low "offers-over" price does is to greatly increase everyone's uncertainty about how much to bid, in the hope that the high bids will go higher still.

If you've set your sights on one particular property, you'll want to be sure that yours is the highest bid, so you'll almost certainly have to offer more than you feel it's "really" worth. In practice, it's much more about deciding what your spending limit is, and sticking to it.

To clarify that: once the vendor has decided to accept someone's offer - including the price, but also any other conditions that have been mutually agreed - it then becomes a legally binding contract to sell and to buy.

That's the good part of the Scottish system; the less good part is the blind bidding process by which you get there.

[Mike Mitchell]

Yes, make it legally binding (or lose the 10% deposit), but cease this ridiculous "offers over" scam. I dabbled with RightMove again today, whilst waiting for my real RM email updates to arrive for Lincs etc, and I played "what ifs" on a number of locations, Ayrshire being one of them. I saw a couple of fantastic, huge properties, and the OO price was £149,950 for one and around £155K for the other. Houses that would cost £400K in Bucks at least. Now, I reckon that both these prices, even for Ayrshire where property is obviously cheaper, are just come-ons to temp prospective buyers to at least have a look. I think the £149K house would probably go for around £180 - 190K, but I have no idea.

I believe that when it comes to the biggest asset most of us will ever acquire, there is no room for funny business and vendors should state the price up front as in England and Wales. As for having to have surveys done on the same house, what if the same surveyor is hired by three or four different buyers? I'll bet he has invested in a very expensive photocopier! Talk about money for old rope.

MM

[Owain]

"sid" wrote | > | Does it kick in 1 (one) millimetre over the border? | > Yes, if the border can be established to the mm. | How would you manage to do that then?

In the same way as you establish property boundaries in any other circumstance. The mm might be slightly extreme in practice, but the principle is valid in law.

| Don't be silly. properties are either registered as Scottish or | English. Nobody gets 2 sets of votes, two different postal | deliveries, rubbish collections etc.

You can have as many votes as you have entries on the electoral register (it is illegal to use more than one in the same election; i.e. if you have a 2nd home you can vote in two different local council elections but you cannot vote twice in a general or European election).

As for postal deliveries and rubbish collections, that depends on how the relevant authorities organise their routes. What do you think happens when the boundary between council areas runs down the middle of the road.

| > | What if a property straddles the border? | > Effectively there would be two separate sales, in two | > separate jurisdictions, with two separate land registries. | > There would after all be two separate sets of council tax | > to pay. | Don't be silly (again)

So what if someone buys adjoining properties, one in England and one in Scotland, and merges them, or builds across the border? The international boundary doesn't move because someone puts a shed over it.

I'm sure I've read of a pub where one end of the bar is in a different licensing authority than the other, and it is/was established on the NI/Irish border to build agricultural sheds spanning the border to facilitate smuggling.

Owain

[Owain]

"Mike Mitchell" wrote | I believe that when it comes to the biggest asset most of us | will ever acquire, there is no room for funny business and | vendors should state the price up front as in England and | Wales.

Where vendors consider themselves lucky if they get 'full asking price' and everyone sits around worrying about being gazumped the day before they move out/in.

Owain

[David McNeish]

Council borders can, though. When the Braehead shopping centre opened, it lay partly in Glasgow and partly in Renfrewshire - the Sainsbury's store straddled the border, so they had to get off-licences from both licensing boards. They've since shifted the border so the whole centre is in Glasgow.

There are many properties (generally larger farms/estates) which straddle county boundaries within Scotland, and those have to be registered separately in each registration county. I suspect there will be some which cross the English border, and the same principle will apply.

David

[Janet Baraclough..]

The message from "sid" contains these words:

This can mean 10

These days Scottish surveyors are legally obliged to tell a client if their firm has already surveyed the same property on behalf of someone else, and to avoid any conflict of interest.

Janet.

[Janet Baraclough..]

The message from Mike Mitchell contains these words:

The Scottish system is an auction. When property in England and Wales is sold at auction, the price starts at a reserve and goes upwards, just the same.

There are also fixed price property sales in Scotland; it's used for newbuilds, and sometimes for property which didn't attract any auction bidders.

As for having to have

That's not permitted.

Janet.

[S Viemeister]

There was one on the Leith-Edinburgh border. Makes no difference now, of course, as Leith has become part of Edinburgh.

Sheila

[Mike Mitchell]

In an auction you get to see what others are bidding and can pull out or go on accordingly. In the Scottish sealed bids system you are driving blind all the way. It is a ridiculous system.

Yes, I saw some fixed price properties on RightMove. Perhaps even the Scots are getting wise to their own grossly iniquitous system.

MM

[Richard Faulkner]

Mike,

you really seem to have been through it!

Offers over, and Guide prices, are nothing new and have been used in england aswell as scotland for years. Auctions are prime examples, although the bidding is not blind.

In England, I often invited interested parties to make their "Best & Final Offers In Writing" by a particular deadline and, whilst never achieving 2x the asking price, there were often some fascinating high offers.

I have also set Guide prices particularly low where sellers had to sell very fast - this usually resulted in many fast offers around the Guide price with the opportunity to bid the price up to its best at the time. I must stress that it was always the buyers that bid the price up, and not the seller.

Why not try it - Guide Price £170,000 or Offers Over £170,000. Dont forget, whatever offer you get, if you dont like it, you dont have to take it.

As for surveyors, in my 17 years in the business, I can probably count on 1 hand the number of times the same surveyor was instructed by 2 or more buyers.

[Mike Mitchell]

It's an idea that I haven't thought of. I had indeed thought of auctioning it, or running a competition, but not to state an artificially low price to tempt buyers. Such a ploy is not widely used in England, however, and I think a lot of buyers would steer clear in the belief that it is just a ramshackle old dosser's hut that the agent wants to shift quickly.

Nevertheless, your suggestion has merit and I'll certainly consider it if Connells' six-week challenge proves unsuccessful.

How about modifying the wording: "Only Cash Offers Over £170,000 Considered"? That would help filter out the time-wasters.

MM

[David]

The system could be in for a bit of a shake up hopefully

There is currently a case with the advertising standards authority, where some propery in teh borders was on at OO £60k or something but was valued by a surveyor at >£120k, as a result one interested party is taking the estate agents to the ASA, on the grounds that the offer price was whollly misleading.

ahh here's an article on the case in question

[Janet Baraclough..]

The message from Mike Mitchell contains these words:

It's an auction where you only make one bid, which is what the property isn worth to you. You can't get carried away and bid more than you intended.

The Scots much prefer their own system; it's fast, secure and there's no gazumping or last-minute bullying. You won't want to hear this, but I bought this place in a week, and sold the previous one in a fortnight. Surveyors, lawyers and mortgage lenders all work at that speed.

I've bought and sold in England and Scotland and much prefer the Scottish, both as a buyer and seller.

Janet.

[sid]

Its not a ridiculous system. You bid what you can afford based on a survey and other professional advice A mortgage lined up and hopefully aware of all other costs associated with buying a property.

In some cases a fax is sent immediately prior to the closing time. Its a system that works well enough

Knowing previous bids may or may not be helpful. It can certainly lead to corruption by estate agents/buyers/sellers depending on the state of the housing market.

assume a rat at a low price like that. Ludicrous indignation is a term I would use for the complainant

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