Editors Blog
Offers over: the devil we know
20 Nov 08
Would it be a good thing if home reports saw their demise?
It is reported today that some solicitors with large property businesses are predicting that with the coming of home reports, the "offers over" method of marketing will wither away. Buyers, it is said, will expect to pay more the sort of price a house has already been valued at; while sellers' expectations will adjust when their house already in effect has a price tag on it.
It is a plausible scenario, albeit a view not by any means shared by all in the sector. It has some attractions on the face of it. Granted, as people now offer subject to survey, there is no longer a risk of losing a survey fee because another blind bidder has put in a higher offer. However you are still entirely in the dark as to what the competition is bidding, and risk either losing a property for which you could have offered more, or paying over the odds because you thought the competition would put in a higher bid or bids than it actually did.
So in this respect, a change in practice that would bring a bit more certainty might be welcomed. However, would introducing one feature akin to the English system not risk bringing other less welcome effects with it? When competition in the market picks up again, it will find an outlet one way or another, and if that is not provided at the offer stage, is it not inevitable that we would then see a prevalence of gazumping to an extent that hitherto in Scotland we have been mercifully spared?
It is the nature of life that no system is perfect. But if certainty is what we are after, is it not better to smoke out, so far as possible, all the bidders as early in the process as we can, rather than risk the anguish to clients of losing a deal much closer to completion?