We are one of Scotland's largest independent firms of chartered surveyors with 30 offices in Scotland covering every postcode.
Offers Over vs Home Report Valuation: What’s the difference?
Regardless of whether you're looking to buy or sell a property, moving house can be a stressful experience. Most people are not used to regularly selling and buying homes and can find much of the process confusing.
In this blog, we'll discuss the often-misunderstood difference between the term 'Offers Over' vs the actual Home Report valuation itself.
Of course, during the buying and selling process everyone involved wants to get the best deal possible, but it can be hard to calculate how much a house is actually worth at a given moment and there are lots of variables that can determine this.
In Scotland, homeowners & agents will set an ‘Offers Over’ price that is usually 10-15% below the Home Report valuation in order to generate interest from potential buyers. Realistically, they expect offers to exceed the Home Report valuation as they are relying on potential buyers finding that ‘little bit extra’ to get their sought after property.
A Home Report
A Home Report is a document which the majority of sellers of a residential property are required to produce prior to putting the property on the market.
It is produced by a Chartered Surveyor who is a member of Royal Institution of Chartered Surveyors (RICS) and should be a Registered Valuer. The Home Report can be instructed by the seller directly to the surveyor or alternatively through the chosen Estate Agent.
A Home Report is split into three parts – a single survey and valuation, a property questionnaire, and an energy report. In Scotland, it is a legal requirement for sellers to make the Home Report available to all prospective buyers.
The term 'Offers Over' simply means that a seller is looking for offers over that specific price. The vast majority of the time sellers will also be looking to sell at a higher price than the property's Home Report value.
Therefore, it's important to both read the Home Report thoroughly and make note of the valuation. We would also recommend seeking advice from your estate agent at this point.
Price vs Valuation
A mortgage lender will calculate a loan amount using the Home Report valuation and, in most cases, as far as the lender is concerned, the Home Report value is the value of the property.
In a competitive market, and in some geographical pockets across the country, it is more likely you will need to offer a price above the Home Report valuation to successfully compete against other buyers.
When a price is agreed for a property in Scotland, the probability is that it will differ from the Home Report valuation, and the impact of this can be significant in a strong market.
However, it's important to remember that a lender will use the Home Report value for mortgage loan purposes. Therefore, the amount of money you offer above the Home Report valuation must come from your own cash resources. Essentially, if you're paying above Home Report value you must treat the excess as separate money.
Depending on prevailing market conditions, it’s worth becoming familiar with the premiums at which properties are selling for above Home Report value, so you can manage your expectations and adjust your buying strategy accordingly.
We are one of Scotland's largest independent firms of chartered surveyors. We have 30 offices in Scotland which cover every postcode, and we provide a complete range of professional property services for residential property owners.
The extent of our office network allows our surveyors to specialise in the property market in their area meaning that you get the very best advice based on local knowledge.