"Mike Mitchell" wrote in message
...
On Wed, 1 Sep 2004 21:51:32 +0100, Janet Baraclough..
wrote:

The message
from Mike Mitchell contains these words:


Please explain why vendors in Scotland largely pursue this
unfair system, and, as you ponder, think carefully on the "unfair"
bit.

If it was unfair to buyers, or distorted property prices, mortgage
lenders wouldn't risk making loans on such purchases.

If buyers are expected to get a valuation, what is wrong with the
concept whereby the vendor, i.e. the bloke with the goods to sell,
gets a valuation and prices the property accordingly?

He does.

I'll tell you
why: It's so the vendor can quote some ridiculously low price, thereby
seducing buyers into his web, banking on the fact that buyers will put
in silly (i.e. exaggerated) offers so that the chance of getting *far
more* than the property is actually worth is greatly increased.

Most buyers have a mortgage. Mortgagors value property before they
decide how much they will lend on it. That simple economic restriction
prevents properties from being sold for "more than they are worth". If
your misguided notion was correct, then half Scotland's property owners
would be in negative equity (owing more on the mortgage, than their
house would fetch if it was sold). Unlike England, negative equity is
almost unknown in Scotland.

Also, the system must be
crumbling at the edges because I am seeing secondhand properties
advertised at a fixed price, so obviously some people must agree with
how I see it.

Fixed-price on a 2nd hand property in Scotland is usually a sign that
the owner is desperate because either, the property is hard to sell, or,
he can't pay the mortgage and the lender is about to foreclose. Or, the
owner has already defaulted on the mortgage and it's being sold by the
lender at a fixed rate just to recover the loan.

Vendors in Scotland must be incredibly greedy or
incredibly frit that they dare not state a fixed asking price, just in
case their pound of flesh isn't two pounds.

Greed would be asking more for a house than buyers want to pay for it.
That appears to be your problem. Sooner or later, you'll understand that
buyers, not vendors, dictate property prices.

Yawn.

MM

Hey Mike

you don't seem to take too much attention to the posts of the people who
actually use the Scotish System do you.

You've now got this idea into your head and you wont let it go, try and open
your mind a little and accept some good information. A seller is also a
buyer and there is no desire for anyone to rip off anybody else. What OO
says is -pay me the market value, whatever that may be, you don't have to
trust an estate agent to set it, who I would rate as the greedy scum that
you apparently envisage all Scottish vendors to be, nor is it set at an
unrealistic/optimistic level by the "greedy" seller.

It strikes me that under the English system the price is set by the seller
and the estate agent, both of whom have a considerable interest in getting
as much as they possibley can, especially in todays market, and may very
well overinflate the price initially to see if they get some mug coming
along. THis number that they make up may just as easily have no relevance
to the valuation whihc is put on the property by an indepent party.

Get this clear it is not the vendors who run/abuse the Scottish system, the
OO price is set/suggested by those who present themselves as the "experts"
.... the estate agents. Personally I strongly disagree with OO set waaaay
under the true valuation, and reckon it should be within 10% of the true
value otherwaise the estate agent is just incompetent.

where the Scottish system does currently fall down is that you may pay for
multiple surveys, or be tempted to survey a property on at a low asking
price. This has been raised many times and there have been rumblings about
changing the way it works.

BUT the positive aspect is that the true valuation isn't set by the estate
agent OR the seller but by what should be a relatively independent surveyor.
It is this valuation that sets the benchmark, not someone trying to squeeze
a few extra quid out of the buyer by putting it on the market at an already
overinflated asking price.
At the end of the day it only goes to a sealed bid if there are 2 or more
interested parties, otherwise it is just a straight negotiation.

cheers

David