Increasing number of home sellers sacrificing highest offer for chain-free sale

As much as £20,000 has been turned down

Scottish home sellers are increasingly sacrificing significant amounts of money by rejecting the highest offer at a closing date and opting instead for a chain-free sale.

Bids that are subject to the sale of another property have become commonplace in the market, but according to lawyer Andrew Diamond, head of residential property at estate agency Lindsays, these bids are less attractive.

He explains: “We are seeing sellers leave significant sums of money on the table by not accepting the highest offer for their property - because that bid is subject to sale of the bidder’s existing home.

Lower offers which are not subject to sale are increasingly being accepted. Picture: John Devlin

An offer subject to sale means that a buyer will not complete the purchase of their next property until their current one is sold.

Bids without the clause are now seen, in many cases, as much more desirable which means that those who have already sold their homes are receiving preferential treatment at closing dates.

The highest price differential the company has seen between a top offer, subject to sale, and the successful offer which was not, is £20,000, but Mr Diamond says that almost all closing dates will now involve a comparison of the buyers’ circumstances.

As chair of ESPC, he reports that the trend is seen across the board and in all regions. “I don’t know one ESPC member firm who hasn’t had the same experience. It is most acutely seen in the family home market in the better parts of Edinburgh, Glasgow and Dundee and the further up the market you get, the more effect it is having.”

He explains that the practice of couching an offer subject to sale came about in different circumstances but is now the wrong tool for the current market.

“In between Covid and the Truss/Kwarteng budget, there was a period of 18 months when the market was moving much faster and therefore people were bidding subject to sale, because so many were losing out on closing dates.”

Its use became almost standard practice with buyers wanting the guarantee of knowing where their next home would be before selling their current property as demand outstripped supply.

But, with a market that is now more balanced and with more properties available, it is the sellers who are seeking the certainty of knowing that a deal for their home can complete smoothly.

Mr Diamond says: “Sellers would rather accept less than face the added complication of their deal being dependent on an unknown sequence of other transactions which could fall apart if any one in that chain fails.

Therefore, he says: “Those who have sold their homes are then getting the pick of properties because they have money immediately available.”

The firm expects that use of the deal condition will decrease rapidly in the coming months as would-be buyers wake up to the fact they are being disadvantaged by it and sellers realise the advantage of a move not being tied into a possibly lengthy property chain.

Mr Diamond added: “Bidders trying to use subject to sale are being handicapped. Those who are not restricted by this are going to find themselves in a far stronger position going up against those who are slower to realise that this is happening.

“The advice is - sell first, ask for a long entry date, and then go house hunting, because the attractiveness of your bid will be boosted quite significantly.”