When you’re looking for a property in Scotland, once of the first things you’ll probably notice is that properties are advertised with a number of different pricing prefixes. We looked at the most popularly used of these – Offers Over – in an earlier article.
Today we look at what it means when a property is advertised at Fixed Price and how much you should bid when properties are marketed in this way.
What Does Fixed Price Mean?
When a property is marketed at a Fixed Price the seller is essentially letting prospective buyers know the price that they are looking to achieve. It’s rare for these properties to achieve more than this value, so it allows buyers to have a high degree of confidence about the maximum price that they will have to pay.
Sellers often use the Fixed Price approach if they want to secure a quick sale, or if their property has been marketed for a few weeks without finding a buyer.
There’s a common misconception that when a home is marketed at Fixed Price then the seller is obligated to accept the first offer that comes in at the asking price. This is not true. An offer which meets the asking price can often be rejected if it is ‘subject to sale’ – i.e. the offer is conditional on the buyer being able to sell their own property.
The seller is entirely free to reject the offer for other reasons as well. Sometimes a seller may opt to reject an offer because of a personality clash with the buyer, though such instances are relatively rare.
How Much Should You Bid For a Fixed Price Property?
In most cases, a clean offer which meets the asking price of a Fixed Price property will be good enough to secure it, but the question of how much you should bid depends on a few factors:
- How long the property has been on the market;
- The seller’s circumstances;
- The level of interest from other potential buyers;
- Your own position on the market.
The final point here is important. If you need to sell your own property in order to buy the one that is marketed at Fixed Price, the seller may reject your offer if they are worried that your own property will not sell quickly. As sellers tend to market their home at Fixed Price when they are looking to secure a quick sale, they may well opt to accept a slightly lower offer if it comes with less risk of a delay.
On the other hand, if you submit an offer for a Fixed Price property that is not dependant on you selling a property, then sellers will invariably be happy to accept any offer that meets the asking price. In some cases, they may even accept a slightly lower offer.
To give you an idea of what this looks like in practise, during 2017 the vast majority – 71.4% - of properties sold at Fixed Price by Warners achieved a selling price equal to the asking price. A reasonable proportion, 27.1%, were secured for less than the asking price however, so if you are able to make a clean offer, you might be able to secure the property for slightly less than the advertised price.
When you see a Fixed Price property that's of interest, make sure to speak to your solicitor estate agent as they should be able to guide you on how much to offer in that specific case.
Should You Market a Property at Fixed Price?
The market in Edinburgh and the Lothians is currently very favourable for sellers so, for the vast majority, the best advice is to market your home at Offers Over. This will give you the best opportunity to get a number of buyers interested, set a closing date and ultimately get the highest price for your property.
In rare cases it may be that you are best served by starting off at a Fixed Price however. Again, be sure to discuss this with your solicitor estate agent as they will be able to advise you on the strategy you should adopt to help get the best result for you.
If you are thinking of buying or selling a property, be sure to get in touch with Warners on 0131 667 0232 or at email@example.com and one of our team will be delighted to help.