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Scottish Legal Guide for Home Selling and Buying

SCOTTISH GUIDE TO BUYING

Although there are estate agents in Scotland, many properties in Scotland particularly in smaller cities and towns are sold by solicitors through 'Solicitors' Property Centres'. Photographs of available properties are put on display in the window and full estate agent style particulars including the name of each individual solicitor handling the sale are available. The service is completely free to anyone looking to buy. Solicitors are even allowed to advertise themselves as 'Solicitors and Estate Agents' and often employ sales staff.

A list of solicitors' property centres can be obtained from the Law Society of Scotland. There are also a large number of estate agents in Scotland which operate very much in the same way as their counterparts in England and Wales.

Before making an offer

  • Inform your solicitor
    Found the house of your dreams? You should immediately tell your solicitor who will then contact the seller's solicitor or estate agent to register your interest. This generally ensures that the property will not be sold before you are given an opportunity to make an offer.

     

     

  • Arrange the survey

    In Scotland you need to have a survey done before you can place an offer on a property (unlike in England and Wales when a survey is done after an offer has been made and accepted). Building societies and banks also require the property to have a survey before they will give you a mortgage loan.

    Your solicitor will instruct the survey once he or she is informed that you are interested and wish to go ahead.

    The different types of survey are similar to those in England and Wales i.e. basic valuation survey, homebuyer's report and full structural survey. Click here for details on arranging a Home Buyers or Full Structural Survey.

    Unfortunately if the survey uncovers serious problems with the property or your offer is rejected by the seller the cost of the survey would have been wasted.

     

  • Arrange finance

    The next step is to arrange mortgage finance with a bank or building society - this could either be in the form of an agreement in principle for a stated amount or a specific mortgage offer relating to the property you are looking to buy. It is also worth keeping in mind that most leading English mortgage lenders will be happy to lend funds for a Scottish property.

Making an offer

If the survey report is positive and you would like to go ahead, the next thing for your solicitor to do is to send an offer in writing to the seller's solicitor or estate agent.

In Scotland the offer is a formal written document, detailing all the conditions on which you are willing to buy the property - this will include the offer price, intended moving in date, and fixtures and fittings to be included in the offer. The offer document will also state that the offer is on the condition that there are no adverse proposals by the local authority relating to the property. This is the equivalent of a local authority search in England and Wales, although the onus in Scotland is upon the seller to show that there are no local authority plans adversely affecting the property. This is the equivalent of a local authority search in England and Wales.

If more than one buyer has expressed serious interest in a property the seller's solicitor will get in touch with all the parties through their solicitors and fix a closing date by which sealed bids for the property must be received. None of the parties will be aware of what the others have bid for. If you find yourself in this situation ask your solicitor for advise on how much to offer over the 'upset price' - keeping in mind that the final decision is always yours.

agreeing the offer

After the fixed closing date, the seller and their solicitor will examine all bids received. Although the party offering the highest price is the successful bidder, the seller can take other factors such as the required moving in date when making a decision.

The seller's solicitor or agent will then inform your solicitor by telephone whether your offer has been accepted. Note that at this stage it is only a verbal acceptance and is not legally binding.

The seller's solicitor will then send the buyer's solicitor a 'Qualified Acceptance' letter. 'Qualifications' generally are technical issues but sometimes can relate to the moving in date, the fixtures and fittings to be left in the property, or other conditions of the sale. There may then be written negotiations (known as the 'missives') on the qualifications. The 'Conclusion of Missives' happens when both sides' solicitors reach agreement on all issues - at this point the offer becomes legally binding on both the buyer and the seller. Neither party can depart from the contract without the consent of the other. Gazumping therefore can not happen in the Scottish system.

The 'Conclusion of Missives' happens when both sides' solicitors reach agreement on all issues - at this point the offer becomes legally binding on both the buyer and the seller. Neither party can depart from the contract without the consent of the other. Gazumping therefore can not happen in the Scottish system. Before the missives are concluded the buyer is strongly recommended to have secured a loan (at least in principle) to assist in purchasing the property.

completing the purchase

Once missives have been concluded, there is a binding contract on both parties with an agreed moving in date, a price and the items that are included in the price. It is quite common for the purchase to be completed now in a matter of days (compared to 4-6 weeks in England and Wales).

Your solicitor will now receive the title deeds for detailed examination, and also certificates from the seller that shows that the property is not adversely affected by any local authority plans. Your solicitor will also start the conveyancing procedure to ensure that the 'disposition in your favor' (the legal document that will transfer the property to you) is ready by the moving in date.

Your mortgage application papers should also be completed now if you have not already done so. Your solicitor normally acts for the lender as well as you (as in England and Wales). They will report to the lender on the title and prepare the mortgage document, called a 'standard security'. Your solicitor will also arrange for the loan to be sent to them before the moving in date when you will be required to pay them the difference between the price and your mortgage loan.

On the completion day, or 'the day of settlement', the following will take place:

  • Your solicitor will pay the seller's solicitor the full purchase price

  • The seller's solicitor will give to your solicitor the title deeds, the disposition in your favor, and the keys to the property

Your solicitor will then do the following:

  • Register the disposition and the standard security in the General Register of Sasines or the Land Register of Scotland, depending on where the property is
  • Pay stamp duty on your behalf (same rates as in England and Wales)
  • Send you the accounts for their fees plus any outlays towards disbursements (e.g. the stamp duty paid on your behalf, registration fees) - if not already collected.

SCOTTISH GUIDE TO SELLING

Inform your solicitor

If you are selling your home in Scotland, the first thing you should do is tell your solicitor before you even put it on the market (unlike in England and Wales where the solicitor comes into play a lot later in the process). This is because a contract for the sale can be concluded within a few days of a formal offer being received and your solicitor will need some time to:

 

  • Look over your title deeds and check that they are sound
  • Check the amount of any outstanding mortgage loan
  • Arrange local authority searches to make sure that the property is not affected by any adverse local authority plans

Marketing methods: solicitor or estate agent?

In Scotland you can market your property through a solicitor as well as an estate agent. You can register your property with your local solicitors' property centre for a charge of around £150 for a period of six months. Solicitors usually charge a sales commission between 1 and 1.5% of the price of the property (excluding legal fees). Some solicitors also charge a single percentage to cover both the selling of the property and the conveyancing.

Estate agents in Scotland operate on a similar basis to those in the UK. Their commissions are generally around 1.5% of the price of the property although lower charges can be negotiated.

Whether you use a solicitor or an estate agent get an estimate for the commission and find out what is included in the price - advertising costs are usually an extra.

You should be aware that you will be expected to show potential buyers around the house yourself. If you employ an estate agent or solicitor to show people around you will be charged a fee.

Advertising

Your solicitor or estate agent will prepare an advert for you and agree its terms with you. They will also consult with you on the upset price and advise you on the price you should hope to achieve.

After people have viewed your property you will hear from your solicitor or estate agent when a viewer has 'registered an interest' (but not necessarily made an offer). You should not sell to anyone without giving everyone who has registered an interest a chance to make an offer.

After the registration of an interest your property will be visited by the potential purchaser's surveyor.

Handling offers

If several potential purchasers have registered an interest in your home then you should fix a closing date for the offers. Everyone who expressed interest will be asked to submit formal written 'sealed' offers through their solicitor by the agreed time and date.

On the closing date you and your solicitor or estate agent will have to make a decision over which offer you are going to accept. If offers are close you may take into account other factors such as when they can move in, and what extras are included in the price. If the top offer is too low you may have to consider re-advertising.

When you have received an offer that you are happy with your solicitor will inform the successful buyer's solicitor that their offer has been accepted. Note that at this stage you have only given a verbal acceptance which is not legally binding.

Your solicitor will then send the buyer's solicitor a 'Qualified Acceptance' letter. 'Qualifications' generally are technical issues but sometimes can relate to the moving in date, the fixtures and fittings to be left in the property, or other conditions of the sale. There will then be written negotiations ('missives') on the qualifications. The 'conclusion of missives' happens when both sides' solicitors reach agreement on all issues - at this point the offer becomes legally binding on both the buyer and the seller. Neither party can pull out from the contract without the consent of the other.

  • Click here To instruct a conveyancer
  • Completing the sale

    Once the missives have been concluded, your solicitor will do the following:

    • send the title deeds of the property to the buyer's solicitor so that they can examine them
    • prepare the 'disposition' (the document that will transfer ownership to the buyer) and make any revisions agreed with the buyer's solicitor
    • notify your lender that missives have been concluded, obtain a redemption statement showing the amount to be repaid on completion of the sale, and get the lender to sign the discharge document
    • instruct searches in the Registers to show that there are no adverse issues relating to the property

    On the completion day, or the 'day of settlement', the title deeds, disposition and the keys are handed over in exchange for the full purchase price. On this date the buyer will be entitled to take possession of the property if he wants to.

    The disposition in favor of the buyer is handed over in return for the buyer's solicitor's cheque for a cheque for the total purchase price.

    Your solicitor will then repay your outstanding mortgage loan and will give you have a cheque for the balance of the price (usually after deducting their fees and outlays).

    Expect your solicitor to send you the balance of the price and their statement soon after the sale is completed.

    This information is merely a rough guide compiled to assist in general terms with what's involved in the legal process in Scotland, seek professional guidance as soon as possible on transactions.