Whether you’re a first-time buyer or looking to move up or down the property ladder, it is important to understand the procedure for offering on properties at a closing date.
What is a Closing Date?
A closing date is set when there are multiple parties who have noted an interest in the same property. This system is unique to Scotland. When a seller or their marketing agent receives multiple offers or parties who have expressed an interest in offering, they may decide to set a closing date. This is to ensure that all interested parties have a fair chance of submitting their best offer by a specific time and date. This process can lead to higher prices for a seller while giving all potential purchasers a fair opportunity to offer.
There is no obligation to make an offer at the closing date, even if you previously noted interest in a property. Noting interest with the selling agent means they will usually keep you updated on interest levels and if and when a closing date is to be set. It is however worth noting that this is not foolproof. A potential buyer who hasn’t noted interest can still make an offer which the seller is entitled to accept without fixing a closing date. However, in practice, if there is more than one interested party, the seller will usually approach the others before accepting an offer and in most cases will fix a closing date.
Prior to submitting your offer at the closing date, your solicitor will find out from the selling agents how long the property has been on the market and how many notes of interest there are. This will help you assess the competition and allow your solicitor to advise you on an appropriate offer.
If you feel you might like another viewing of the property this should be done before making your offer at closing. If your offer is accepted on a property, you are not usually allowed to view again until the missives (contract) have been concluded and are legally binding.
Preparing to Make Your Offer at Closing
Before making your offer, you should check the Home Report for the property. This can be obtained from the selling agent and will detail the property’s value and condition. This Report will also include information on the property’s energy efficiency.
You should contact a Conveyancing Solicitor experienced in property transactions. Your solicitor will review the Home Report on your behalf and can give valuable advice on how to approach offer. They will also highlight to you any areas of concern which they feel you should be made aware of, for example if any specialist reports are recommended.
When preparing your offer, your solicitor will consider not just the price but also your position as a buyer. Factors such as whether or not you have a property to sell, your mortgage approval status, and whether you’re a cash buyer can have an impact on a seller’s decision on whether or not to accept your offer.
The seller will usually be expecting an offer of at least the Home Report value for the property but if a property is popular enough to go to a closing date, it is likely to be higher than the home report value. You will not know what other parties are offering at a closing and should bear in mind that this is your one chance to make an offer, and it should be for your best and final price. In considering how much to offer you should also take account of how many offers the seller is expecting.
The seller does not have to accept the highest offer, or any offer at all. Apart from the price, the seller will consider other factors, such as whether or not the purchaser requires a mortgage or to sell an existing property to fund the purchase or what entry date the purchaser is expecting.
Submitting Your Offer
Your solicitor will take instructions from you on your offer and have it prepared in writing ready for submission. The offer is then emailed to the selling agent shortly before the time limit which has been set for offers.
After Submission
The seller and their Agent will review all offers received. You will usually find out within a few hours whether or not your offer has been accepted. If you are unsuccessful the selling agent will not disclose the successful price but may give you an indication on whether or not you have missed out by hundreds or several thousands. If your offer has been successful, it will be passed to the seller’s solicitor who will liaise with your own solicitor in the conveyancing process.
If you are obtaining a mortgage to help fund your purchase, then you should contact your financial advisor or mortgage provider at this stage to advise your offer has been successful. They will then start the mortgage application process in full. Your solicitor will not conclude missives on your purchase until your mortgage offer has been issued.
Conclusion
Moving home can be a stressful time but choosing a solicitor experienced in residential conveyancing matters should help make this a smooth and straightforward process. At TC Young, we have a dedicated residential conveyancing team with the legal expertise to advance your transaction from initial offer to final entry date, swiftly and smoothly.
With decades of experience, we understand exactly what is happening in the market and can give expert advice on how much to offer for your new home. We can advise on which agents are best in your area to sell your home, and we will work with them to make your transaction progress as smoothly as possible
