One of the questions I get asked most often comes from buyers and it is: ‘How much do I have to offer, in relation to the Home Report valuation, to buy a property?
First the bad news; there is no hard and fast answer to that question. There are such huge differences between one area and another that there can be no single answer that would be right for everywhere.
Now for the better news; we have recently surveyed GSPC member firms on exactly this issue and so we have some data to go on.
Just over half (55%) of GSPC members report that they are now generally selling properties at or above Home Report valuation. The remaining 45% report that, most of the time, sales in their area are at or below the Home Report value. But even here, members report some properties selling above valuation and three quarters (75%) of firms say that they have sold at a closing date in the last three months.
That in itself is a significant shift in the market. At this time last year, sales were just starting to grow significantly, but the great majority were at or below Home Report valuation and closing dates were a rarity. It is a measure of how much things have changed that the majority of properties are now attracting offers that at least match Home Report value.
The difference between sales above and below valuation is almost entirely attributable to location, although differences in property size and style also influence the outcome. In some areas, notably the West End of Glasgow, parts of East Dunbartonshire and East Renfrewshire, demand exceeds supply to the point at which there is competition between buyers for the limited numbers of houses coming on to the market.
Other areas, however, have not seen demand grow as strongly and in these locations buyers are still hoping to buy for less than Home Report value – although they do not always succeed.
In both cases, however, the variation from Home Report value is generally not huge. Those firms reporting sales above Home Report value say that the sale price is normally around 5 – 10% above valuation. Those in areas where sales are being concluded below Home Report valuation say that offers are generally 5 – 10% below valuation.
But there are always exceptions to the rule with some sales significantly above Home Report value.
So, what’s a buyer to do? Now this is something of a Christine Keeler moment and you will think ‘He would say that wouldn’t he’ but the answer is nevertheless the right one – take advice from a local solicitor estate agent. The difference in market conditions between locations that border each other can be so great that it is impossible to give generic advice on how much to offer that would be of any value.
Fortunately, there is a network of GSPC member firms across west central Scotland (you can search for a firm near you here) who can give you well-informed, up to date advice on their local market and on how much to offer for a particular property.
GSPC members are particularly well-placed to help because they are both lawyers and estate agents. That gives them a unique insight in to the market that comes from working for buyers as well as sellers. So, if you are thinking about buying, get someone on your side who really knows what’s going on and ask a GSPC member firm for advice.