never to discuss my personal matters with you (or the friendly selling agent)

Fair enough. Although most of my info did not come from the selling agent who I do not know.

How does 'offers over 195,000' imply that she expected to get 18-23% above that? Is this some unwritten law with the Scottish 'offer' system?

Yes. You raise a very good point here. In England, I think the asking price tends to imply the maximum price the seller actually wants, whereas in Scotland it is the minimum. There are two methods of selling a house in Scotland, 'Fixed Price' and 'Offers Over'.

Historically, the vast majority of houses were sold using 'Offers Over', and this is still the case. 'Offers Over' means those interested in buying the property put in an offer over the asking price, and the seller usually selects the highest bid. Prior to our buying a house in Edinburgh 7 years ago, autumn 2001, the spread between overs-over price and actual selling price was typcially 10-15%. After 2001, the spread was typiclaly 20-30%, depending on location (what city, where in the city), house or flat, local amenities etc. Edinburgh for example boomed after the new parliament was completed and for houses in prime sites, you typcially had to put in an offer about 30% over the asking price. At the height of the madness, offers were sometimes 50+% over the asking price. In Aberdeen, the big boom did not arrive until 2006 when the average property price rose by almost 30%.

Fixed-price means - this is the selling price, take it or leave it. Until recently, fixed-price implied there was either something wrong with the property, in a 'bad' location, needed a lot of work done on it, or the owner required a quick sale for whatever reason. But the number of fixed-price sales, although still very much in the minority, has exploded over the last year or so. For example, in the NE of Scotland, Aberdeen and Aberdeenshire, there were for many years about 100 properties for sale fixed-price. By autumn of last year, the number was up to 400, and by spring of 2008, it had increased again, to over 700 (Housing bubble could be on brink of bursting). The selling prices have not dropped much, yet, while the total number for sale has risen, as has the proportion for sale at fixed-price. Personal observation suggests that all types of property are now going for fixed-price, but the sellers are still hoping to get yester-years prices.

If a house is put on the market at offers-over, and the price is perceived to be too high, buyers will not go for it. What they can do, and I am sure some are, is put in a lower offer before the bid-date (closing date) ends. But sellers still have not adjusted to the new, much lower prices people can afford and, for now, are refusing the lower offers. Thus the growing number of fixed-price houses that are not selling. Given the rate at which property prices are currently falling in the UK, in a year's time the sellers may well look back at the offers being made now with nostalgia.

Yes, prices are going down but if you were selling a house today how would you price it

Typically, all estate agents have a record of the asking and selling prices of properties, at least locally / regionally. So the estate agent would be able to tell the seller what the track record has been over the last year. There have been various articles in the UK media over the last few months saying this is becoming increasingly difficult because in some areas so few properties are being sold. For now, where there is doubt, the advice seems to be, go high rather than low.