SMOH means nothing, so it's always a good idea to verify. I prefer to get a lot of information verbally and then subsequently ask for receipts, records, verification, etc...if something turns out to be a false claim I then assume everything is.
Likely mechanics will mean one thing (and that's likely not going to be uniform either) , owners another, brokers yet another. Most owners have absolutely no idea what an overhaul means (forum members here are the exception). As Pete noted, without a detailed receipt showing parts, labor, and details, assume nothing was done. The idea that an owner doesn't know his own cruise RPM, speed and fuel consumption, for example, or has never had an oil analysis done, but readily verifies his engines have been "rebuilt" or "overhauled" is like trusting the government to take care of you.
When I had a cylinder kit overhaul done on one engine and the heads tested and both engines disassembled for removal,cleaning and pressure testing of the cooling system components the receipt details were three or four pages long...
I see nothing wrong with a top end rebuild/cylinder kit overhaul in a typical cruising boat with moderate HP/cube run at moderate RPM and used a few hundred hours annually. For a high power sport fish that will be run hard, maybe five hundred or a thousand hours annually, it's a very different equation. My old 1970's 8V71TI's at only 435 HP for example are a far cry from newer 671TI's cranking out 575HP. And I'd be more leery of a light "overhaul" done just prior to placing a boat on the market versus one that was done a season or two prior and has some run time.