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What is a Closing Date?

What is a Closing Date?

The Cameron Stephen & Co. guide for First Time Buyers to explain about Closing Dates and answers to FAQs.

What is a closing date?

Loved by sellers but never popular with buyers, the closing date is simply the date set by the seller for any buyer interested in making an offer to submit their best and final offer.

A seller wants to achieve the best price possible for their property. If there are several buyers all interested in buying the property then a closing date is set. At the closing date, all buyers are invited to submit their offer in writing without knowing either how many buyers are going to make offers or what prices they will be offering. The seller then chooses which offer to accept – usually the highest offer.

The benefit to the seller is that this encourages buyers to offer more but the downside for all buyers is that you don’t know how much to offer and generally market-wide this results in property prices rising.

That is the Edinburgh market at the moment and it has been a sellers market or rising market for the past few years. It is why we have seen some parts of Edinburgh seeing property price increases of 10% or more per year.

Is the closing date system unfair for buyers? Yes, but at present it is the only system and unlikely to change. The saving grace is that in a few year’s time when you come to sell you too will benefit from the closing date system.

How do you find out if a closing date has been set?

Most property portals (zoopla etc) don’t have the facility to highlight a closing date, but the ESPC website does. So if you save your properties then you will get notified that a closing date has been set. However the best way is to have us, as your solicitors, note your interest. The selling agents will let us know, and we shall then let you know.

Do all properties for sale go to a closing date?

No. Generally speaking most agents wait until three buyers have noted interest before setting a closing date but that is not a hard and fast rule.

Is the seller required to set a closing date?

No. A seller is entitled to accept an offer at any time even if other buyers have noted their interest, but generally only do so if the offer is a good one. However, once a closing date has been set, the seller will not consider an offer in advance of the closing date.

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Can you make an offer before a closing date has been set?

Yes. As part of our service to you as a buyer, when you tell us you are interested in a property, we shall note your interest with the selling agents and find out a little more about the property. So long as a closing date has not been set, we can at that time make an offer.

Can you make your offer yourself without going through a solicitor?

No. The offer submitted at a Closing Date must be in writing and in the proper legal form. Since it is such an important step in the process of buying a property it is essential that the offer is prepared and submitted by your solicitor.

Will it cost you anything to make an offer at a closing date if the offer isn’t successful?

This varies from solicitor to solicitor. However at Cameron Stephen we don’t charge you for making an offer. It is all part of the purchase service.

Do you get to know who the other buyers are and what price they have offered?

No. The beauty of the closing from the seller’s POV is that all buyers are offering “blind”. No one knows what price the other buyers are offering and in a rising market – as we have at present in Edinburgh – this means buyers are having to offer prices well over home report values.

So, how do you know what price to offer?

You don’t. We can tell you from our knowledge of the market what we think the property is likely to sell for but even we are surprised on occasions at just how much some properties sell for in Edinburgh. The only things you should bear in mind are to only offer what you can afford to offer and only offer what the property is worth to you.

Something quite a few buyers do is to add to the price an odd or lucky number. Who knows, if you and another buyers offer roughly the same amount then adding those few extra hundreds might make the difference.

In short, offer your best and final offer.

What other information is useful to the seller?

Usually the seller will accept the highest offer but sometimes additional factors do come into play. As a first time buyer you will have the advantage of being chain-free. So we shall always let the selling know if you are a first time buyer.

When do we find out if your offer is successful or not?

Usually a closing date is set for 12 noon and so we usually find out later that afternoon. Our practice is that if we haven’t heard from the selling agents by 3pm we give them a call for an update. We shall keep you updated and will let you know the result as soon as we find out ourselves. We appreciate that you will be anxious to find out and it’s not always easy to get on with your day as normal with your fingers and toes crossed.

Do you get to know what the highest offer is if your offer isn’t successful?

No. That information is private between the seller and the buyer. We shall be given an indication of roughly how much the price is but not an exact figure.

Do you get a chance to increase your offer?

No. The purpose of the closing date is to have everyone offer their best and final offer. Although like an auction in some ways, the big difference between a more usual auction and a closing date is that buyers only get to offer one time.

What can you do if you find yourself being outbid at closing dates?

There are several options.

First, delay your search for property until you have built up more savings or see if the Bank of Mum and Dad can give you a little more assistance.

Second, see if you can find any properties that are listed at a fixed price but you will need to act fast.

Third, consider changing your preferences and consider perhaps smaller (lower priced) properties or properties outside your preferred areas.

Fourth, consider buying a new build property which has the benefit of being fixed price.

And what happens if your offer is successful at the closing date?

That would be cause for a small celebration that evening. But it is only one step (albeit a very important step) towards buying your first home.

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