How much to offer on a house in Scotland

There is no formula that tells you the right offer, but there is a method. Work from your own limits first, then from the evidence about the property, and only then from what you think other buyers will do.

Step 1: Set your ceiling

Your ceiling is the most you can pay, not the most you would like to pay. Add your mortgage (based on the valuation, not the price) to the cash you have, then take off LBTT, legal fees, registration dues and moving costs. If you go over the Home Report valuation, the extra comes from your cash (see offering over the valuation).

Step 2: Look at what similar homes sold for

Asking prices tell you what sellers hope for. Sale prices tell you what buyers actually paid. Look for homes with the same number of bedrooms, a similar size and condition, on the same or nearby streets, sold in the last 6 to 12 months. Sold prices recorded by Registers of Scotland are shown on several property websites.

Looking at a specific property? Get a free report on that home, written around what you need.

Step 3: Read the Home Report properly

Note the valuation and every category 2 and 3 item (see category ratings explained). A home valued at £200,000 that needs a new roof is not worth the same to you as one that doesn't.

Step 4: Adjust for costs the price doesn't show

• Repairs flagged in the Home Report
• Factor fees and planned common repairs for flats
• Energy costs if the EPC rating is low
• Work you would need to do to make the layout work for you

Step 5: Judge the demand

• How long has it been on the market? Weeks rather than days usually means less competition.
• Has a closing date been set? The agent may tell you how many notes of interest there are.
• Has the price been reduced, or has a previous sale fallen through?

High demand means you may need to offer more to win. It does not change your ceiling.

Step 6: Choose a precise figure

Many buyers offer a precise amount rather than a round number, for example £203,250 rather than £200,000 or £205,000, to edge past offers clustered at round figures. Your solicitor can advise on what is usual locally.

Worked example

Comparable sales suggest the flat is worth around £200,000 in good condition, so about £195,000 after repairs. A closing date has been set with four notes of interest, so you expect competition. A sensible offer might be around £201,500: above the valuation, inside the comparable range, and below your ceiling.

Illustrative only.

Reading your local market

How far over the asking price homes sell varies a lot between areas, property types and seasons. Before you set your figure:

• Look at how quickly similar homes in the area went under offer.
• Compare the asking price with the sold price for recent sales.
• Ask the agent what the last similar property went for.
• Watch how many properties in the area go to closing dates.

Properties that have been on the market a while

If a property has been for sale for several weeks without a closing date, there may be less competition. It can be reasonable to offer at or even below the asking price, especially if the Home Report flags repairs. Ask the agent whether there has been any interest.

Fixed price and offers around

• Fixed price: offering the asking price quickly usually matters more than the figure.
• Offers around: offers close to the figure, above or below, are expected.

Common mistakes

• Starting from the asking price instead of your own budget
• Ignoring the cost of repairs flagged in the Home Report
• Offering more than you can fund, because the lender lends on the valuation
• Raising your ceiling on the day of a closing date
• Forgetting that LBTT rises with the price

Try your own numbers with the over-valuation calculator and the LBTT calculator.