In Scotland properties that are put up for sale will have had a Home Report carried out on the property before the estate agent places the property on the market. The Home Report is a detailed and in depth valuation report carried out by a chartered surveyor. This report tells the seller and all potential buyers a whole host of information about the property in question.
As the buyer is scheduling viewings it is important that you request the Home Report for the property you are viewing in advance, many estate agents will have this sent out automatically on booking a viewing. If you are particularly interested in a given property it is also always a good idea to share this with your mortgage adviser. This is to ensure the property would be to confirm whether or not the property is mortgageable or not – or if there could be any sort of restrictions.
Home Report value –
Somewhere in the middle of the Home Report you will find the valuation of the property as determined from the appointed surveyor. This figure is what your mortgage will be based on. When submitting your application your mortgage advisor will submit to the lender the property value or the purchase price – which ever is lower. In these times it is particularly common for a property to be sold for higher than the Home Report value.
Closing dates –
A closing date is a date and time set my the sellers estate agent for all offers on the property to be submitted. The majority of properties will go to a closing date due to the level of demand. All interested parties submit their final offer and after that deadline the seller chooses which offer they accept, usually the highest or best offer secures the property.
But what about paying over the valuation? –
This is possible and very common, especially if the property goes to a closing date. This means that you offer to pay more than the property value in order to increase your chances of securing the property. If you are to pay over the Home Report value then you would be required to find the difference between the value and the ultimate purchase price in addition to your deposit. An example is below based on a £100,000 Home Report value using a 10% deposit – but the client has purchased the property for £110,000.
Purchase price – £110,000
HR/Property Value – £100,000
Mortgage – £90,000 (90%)
Deposit – £10,000 (10%)
Over HR Payment – £10,000
TOTAL DEPOSIT – £20,000
Offers Over, Offers Around & Fixed Price –
All of terms are how a property is marketed. There are other terms that come up, however these are the main ones you will find on the property portals. Overall these are not something to take notice of, most of the time an estate agent when a property is new to the market they will list the property as Offers Over slightly less that the Home Report value. Do not confuse this as the asking price, this method is primarily a marketing method designed to attract more potential buyers
Only time this would be different is with a Fixed Price. If you see a Fixed Price listing this can either mean the seller is looking for a quicker sale or that the property has been on the market for a while. The fixed price figure is typically Home Report value or close to that figure.
If you have any further questions regarding the Home Report or the buying process please speak with your mortgage professional.
*** This article should not be taken as mortgage advice. For mortgage advice please speak with your mortgage adviser ***