Asking Price - Everything You Need to Know

06 December 2021

What is an asking price?

The ‘asking price’ of a property is the price it is being advertised for.

It can be confusing when buying a property as often, the ‘asking price’ isn’t the price a seller is hoping to receive. Usually, sellers will be planning to sell their property for a higher figure than the asking price.

To add to confusion, properties are usually advertised with an “offers over” asking price, as well as their official Home Report valuation, leaving price open to interpretation.  

The more important figure is the Home Report valuation, as it has a factual basis – mortgage valuations will be based on the figure quoted in the Home Report.

In many cases, properties sell for a higher figure than either of these prices, but you can use them as a guide to judge what price the seller may deem acceptable.

Other pricing terms that exist for property

‘Offers over’ is the most common term used in property pricing. This means that the seller will only consider offers higher than the price quoted – but as explained above, the safest course of action is to examine the valuation in the Home Report, as the ‘offers over’ price is generally lower to attract more interest, and is not a serious reflection of the figure the seller wants.

‘Offers in excess of’ means the same as ‘offers over’ – therefore, for example, if a property is advertised at ‘offers in excess of £250,000’, it means that the seller will only consider offers that match that figure or are above it.

‘Offers in the region of’ means that the seller is open to negotiation. It is always best to discuss with your solicitor and the selling agent when considering a property listed this way, as they may be able to offer you more of an insight into what might be an acceptable price to offer.

Properties may be advertised with a ‘fixed’ asking price which means the seller would be happy to accept an offer of this price from the first buyer in the correct position for moving.

Properties listed as ‘price on application’ aren’t as common. This is where the asking price is withheld, and you will need to contact the selling agent to find out more details. This system is mainly used to attract serious buyers only, perhaps when a seller is especially private, or a property has a particularly high value.

Should I offer over or under the asking price?

Your solicitor estate agent will guide you when it comes to making an offer on a property. While it is much more common for homes to sell for over their asking price, it may be possible to have offers accepted for under the asking price. Every property and seller is unique, therefore, you can never tell what price a seller might be happy to accept until you as the question.

Does the asking price affect my mortgage?

It does, yes.

It’s important to remember that when buying a property in Scotland, mortgage lenders will only consider the official valuation of the property when it comes to deciding on your eligibility. Sometimes, they will consider the asking price, but this is only the case if you pay less than the Home Report valuation for the property.

This means, any amount that you offer to pay over the Home Report valuation cannot be included as part of the property’s purchase price in terms of your mortgage, and will need to be covered by your own finances.

For example, if you choose to bid 5% over the property’s Home Report valuation, you will need to pay that amount yourself, on top of your deposit and legal fees – the ‘overbid amount’ cannot be incorporated into your mortgage.