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Buying in Scotland

Introduction

Scotland’s system of property purchase differs from that of England and Wales. The stages are broadly similar, but the order in which they occur, the procedures and the legal terms used are not.

Another dissimilarity is that, in Scotland, property is offered for sale through solicitors as well as estate agents.

Firm Foundations

Before you start househunting, you’ll need to do some groundwork.

Set your budget

Calculate the amount you can afford, bearing in mind such factors as your savings, the amount you will be able to borrow, and how much the sale of your present home is likely to raise.

As well as the purchase price, you’ll need to include the other costs of buying a property, such as:

• Solicitor’s fees
• Land Register of Scotland fees
• Search fees
• Stamp duty (depending on the property’s value)
• Mortgage lender’s fees
• Survey fees
• Buildings insurance
• Removal expenses

If you plan to borrow, obtain a ‘mortgage in principle’. This means that, subject to a satisfactory valuation, the agreed loan will be granted.

Choose a solicitor

Although, in theory, it is possible to do your own conveyancing when purchasing property in Scotland, it is customary to use a solicitor. For reasons that will become apparent, you should pick one local to the area in which you are buying. Obtain a written estimate of fees and costs before entering into any agreement.

Note that the same solicitor cannot act for both purchaser and seller.

Finding a property

Once you have decided on the type of property you want and your preferred location, you are ready to begin your search. The following may be useful resources:

• Estate agents
• Solicitors’ property departments
• Solicitors’ property centres. These are cooperatives that provide details of all properties being sold by solicitors in the area
• Newspapers and magazines
• The internet

Make a checklist of your requirements, so you can assess how well each property you view corresponds to them.

The purchase process

1. Note your interest

Immediately you find a property you want to buy, tell your solicitor, who will inform the seller’s solicitor/estate agent. This is called ‘noting interest’.

Once this is done, the seller’s solicitor/estate agent will give you the opportunity to make an offer. If there is more than one potential purchaser, he will usually set a deadline for receipt of offers.

If the sale is being conducted privately, you should notify the seller of your interest and then lodge a formal offer with his solicitor.

2. Arrange a survey

In Scotland, it is customary to have a survey done before making an offer. Your solicitor will organise this.

If you are applying for a mortgage, your lender will require a survey, to ensure the property will provide appropriate security.

In some cases, a seller will commission a survey and make its findings available to potential purchasers.

3. Make an offer

Following a satisfactory survey report, your next step is to make an offer. This is done through your solicitor, by formal letter to the seller’s solicitor/estate agent.

The letter is roughly the equivalent of the draft contract in England and Wales. It specifies all the conditions subject to which you are willing to buy, including:

a. How much you propose to pay

This can be tricky. Properties are usually advertised at an ‘offers over’ (or ‘upset’) price. As you don’t know how much others have offered, you may end up paying over the odds – or losing the property.

Your solicitor should be able to advise you on the amount to offer; he will almost certainly have information about prices achieved for similar properties locally.

Sometimes a property is offered at a fixed price, perhaps because a quick sale is required. The first acceptable offer at the stated price is generally accepted, but bear in mind that you are not obliged to offer the price quoted.

b. When you want to take possession

The settlement date, or date of entry (equivalent to the completion date in England and Wales), can usually be negotiated. It will depend partly on the length of time it will take to complete the legal formalities and arrange your loan. Typically, it will be between a month and two months after your offer is accepted.

c. What extras you want to buy

The property details will specify what is included in the price and what extras (carpets, white goods, and so on) are available. If there is competition for the property and one prospective purchaser is offering a higher price for the contents than another, this can be a factor in your offer’s success or failure.

d. Legal matters

The offer will be made subject to your receiving a clean title, the property’s not being negatively affected by planning proposals, and so on.

If you intend to put the property to anything other than normal residential use (for example, if you want to use part of it as an office), inform your solicitor, so that he can include the relevant conditions in the offer – or you may discover, too late, that your title forbids such usage.

4. Conclude the contract

If, by the deadline, more than one offer has been received, the seller’s agent/solicitor compares the offers. He takes all factors into account, but price is usually the clincher.

A decision is normally made within hours of the deadline. If your offer is accepted, the seller’s solicitor issues a qualified acceptance, pending negotiations on the details of the final contract. Neither side is legally bound at this stage.

Once all details have been finalised and your solicitor has dealt with the legal matters specified in the offer, the two solicitors exchange letters. Known as ‘conclusion of missives’, this stage is equivalent to exchange of contracts in England and Wales, though a deposit is not usually paid. Both parties are now legally committed.

5. Complete the purchase

Between conclusion of missives and settlement, your solicitor completes the legal formalities and liaises with your mortgage lender. In most cases, he will act for both you and the lender throughout the purchase.

He also informs you of the total sum required for settlement, including the purchase price, his fees, and the other costs. Cleared funds will be required, from whatever source, by settlement day.

When the day arrives, your solicitor pays the purchase money (minus any deposit) to the seller’s solicitor, and arranges the transfer of any stamp duty to the Inland Revenue. The seller’s solicitor sends your solicitor the disposition (conveyance) and the other documents.

You can now collect the keys – and crack open a bottle of something sparkling.

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