Buying or selling – all you need to know to navigate the tricky world of Edinburgh’s property market
There is no doubt about it, the Edinburgh property market can be tricky to navigate, especially at the moment. Here, Gibson Kerr outlines the main points to bear in mind.
Gibson Kerr often hears from clients who are buying and/or selling and who are completely confused by the valuation process. The market is ever-changing, and with the current economic upheaval, things are more uncertain than ever.
Selling a property
The first step when putting a property on the market is to appoint a solicitor to manage the sale and they can advise you on the process, including arriving at a sale price. All you need to do is pick up the phone or email to get the ball rolling.
You will need to get a home report produced, this is managed by your solicitor, who will appoint a surveyor to carry out a survey and give the property valuation. This will be available to all potential buyers and will cover any work required on the property as well as the energy efficiency rating.
You have three options when putting your property on the market in Scotland. These are:
This is by far the most popular option in the current climate, but it can be confusing for buyers. To attract interest, which inevitably drives up the final price achieved we would typically advise selling clients to pitch the asking price at 5% under the valuation. It is impossible to tell what offers will be made, but recently offers of over 10% of the valuation have been common and offers 20% or more above valuation are not unheard of on popular properties. When a seller gets more than one note of interest, they can set a closing date and all offers must be submitted by then. We often advise clients to bear other considerations in mind when accepting an offer, including the buyer’s status - whether they have a property to sell or are in a chain can be very important. Being a cash buyer who doesn’t need to sell puts that person’s offer in a very strong position.
This option usually sees sellers listing at the home report valuation price. If there is a lot of interest in a property, a closing date can still be fixed and a bid submitted at the closing date. If there is less interest in a property, a purchaser may be able to negotiate a price below the offers around the price.
This option is where sellers know the exact amount they want for their property. It can be very attractive for buyers to know they are not entering a closed bidding system as the first person to offer the price will usually be accepted.
Depending on your situation and what you want to achieve in terms of price, your solicitor can advise you of the best option for you to gain maximum interest.
Although the recent hike in mortgage rates has not had an immediate effect on the property market or house prices, it is expected that this, coupled with the cost of living crisis will create major changes in the market. Our team will continue to monitor changes in the market and advise our clients using the most up-to-date knowledge of the market as things develop.
Buying a property
The three options outlined above illustrate what buyers can expect when looking to purchase a property. With Offers Over being the most popular way of selling in Edinburgh at the moment, it can be confusing and frustrating for potential buyers. Our expert property team are here to advise clients on the best way forward. Here are a few tips on buying in Edinburgh:
At the moment, you should be prepared to offer over the valuation. The current market is still quite competitive and if you are looking at an ‘offers over’ property, you may need to factor in 10% or more above the home report valuation, but every property is different and you need expert advice.
But only offer what you feel the property is worth. Bear in mind that the market is likely to continue to fluctuate and the value of your property may drop in future.
You can only borrow against the valuation of the property, so if you require a mortgage, you need to consider that any amount over the valuation cannot be included in the loan.
Be buyer-ready. Sellers prefer buyers who already have their property sold or on the market, if you are not a first-time buyer. It is also advisable to get a mortgage Agreement in Principle in place before making an offer.
In this ever-changing property market, it is vital that you work with someone you can trust. At Gibson Kerr, our expert property team are dedicated to helping our clients get the best outcome, whether buying or selling or both.