Buying and Selling Properties in Scotland
We have made quick overview of the process in buying and selling properties in Scotland in order to help you be prepared,equipped and informed.
Scotland has its own legal system and law governing the ownership of land and property. Most homes are sold on the basis that the buyer gains the right to occupy and use the property for as long as they own it. The concepts of leasehold and freehold found elsewhere in the United Kingdom do not generally apply in Scotland. In Scotland, the buyer’s solicitor makes a written offer to buy and the seller’s solicitor accepts it in writing. The solicitors then exchange letters, known as ‘missives’, clarifying the details and conditions of the offer and acceptance. Once these details are agreed, the ‘missives are concluded’ and both parties have a binding contract. If the buyer cannot fulfil the obligations set out in the missives, they may be liable to pay the seller thousands of pounds in damages. Therefore, before making an offer, the buyer must get legal advice and arrange the finance to meet the purchase price. Until missives are concluded, either the buyer or the seller can withdraw without penalty, although this rarely happens in practice. Once the missives are concluded, however, there will be a binding contract and an agreed date of entry, and you cannot be ‘gazumped’ or ‘gazundered’ – that is, the seller can’t accept a higher offer from someone else and the buyer can’t withdraw from the agreement and then make a lower offer instead. This guidance tells you about: the Home Report the legal processes of buying and selling a home what you can do if things go wrong, and where you can find further information.
With some exceptions (see below), a seller or their solicitor or estate agent must give potential buyers a copy of a Home Report. The report has three parts: a single survey and valuation a property questionnaire an energy report.
There are exceptions to the duty to provide a Home Report. These include: houses that have been on the market continuously since before 1 December 2008 new housing sold off-plan or to the first occupier newly converted property not previously used in its converted state right-to-buy homes dual-use homes used for residential and non-residential purposes seasonal holiday homes as defined in planning law (as distinct from second or holiday homes that could be used all year if the owner so chose).
Even if a home doesn’t need a Home Report, the seller must still give potential buyers a valid energy performance certificate for the house if they ask for one.
Buying a home In Scotland, most houses and flats are sold through a system of ‘blind bidding’. The seller asks for ‘offers over’ or ‘offers around’ the valuation in the single survey report. This indicates the minimum price the seller expects to fetch. How much you will actually have to pay will depend very much on how busy the market is at that particular time and how much competition there is from other potential buyers. Sometimes property is advertised at a fixed price.
Making an offer If several potential buyers ‘note’ (formally notify) their interest in a property, the seller’s agent will set a time and date – the closing date – for offers to be made. This should allow enough time for you to arrange finance for the purchase. If you are seriously considering making an offer, make sure your solicitor ‘notes’ your interest with the seller’s solicitor or estate agent before you arrange finance, or they may not let you know about any closing date. If a closing date is not set, that may be because of a lack of interest in the property or simply a slow market, and you may be able to negotiate a price. You and your spouse, civil partner or partner can buy a home together by making an offer in both your names and having the title deeds prepared in your joint names. Your offer to buy should include a brief description of the property, the proposed date of entry (the date you want to get the keys), the price and any items you wish to buy from the seller. It will also include conditions, which will vary from one transaction to another. Your offer and the seller’s acceptance, which must come from the solicitors of each side, take the form of an exchange of letters known as missives.
New homes The procedure for buying a newly built home differs from buying an existing one. The home advertised may be part of an incomplete estate or may not even have been built yet, and it will usually be offered at a 6 fixed price. Similarly, a conversion or renovation may be offered for sale before the work is complete. With a newly built or converted home, the builder makes an offer to sell to the buyer. Most builders have a standard form of offer that sets out the conditions on which they are prepared to sell. You should arrange your loan and take legal advice before you accept the builder’s offer, because your acceptance is legally binding.
Once the missives are concluded and you have an agreed contract with the seller, your solicitor will carry out the conveyancing, which is the process of transferring the title (ownership) of a property from the seller to the buyer.
Settlement This is when you get possession of the property, and usually happens on the agreed date of entry. On settlement, your solicitor will: certify to your lender that the title is good (that the property has been properly put in your name) get the loan cheque from your lender, and obtain from you your contribution to the purchase price.
Costs There are two elements to the costs of buying a home: professional conveyancing fees and outlays. Outlays, which are costs outwith your solicitor’s control, include: fees and taxes payable to the government, such as the fees due to the Registers of Scotland search fees, and if it applies, stamp duty land tax.
Selling your home You can advertise and market your home yourself or use a selling agent, such as an estate agent or solicitor. Most solicitors who do residential conveyancing also provide a full estate agency service. If you own your home jointly with one or more other people, you must get their consent before you can sell.
Before you put your home on the market, you should also: consider whether it is worth doing any repairs, maintenance or redecorating make sure that everything is in working order if you have had any changes done that required planning permission or building control consent, check that you have the necessary documents and make your solicitor aware of these if you have had any remedial treatment done that is covered by a guarantee or insurance, check that the certificates or policies are available and valid.
Using an agent You can use an estate agent or a solicitor as a selling agent. An estate agent will prepare the property description for your home, advertise and market it for sale, deal with enquiries, advise you on offers and pass any formal offers to your solicitor. It is a good idea to find an agent who is a member of the National Association of Estate Agents. You should shop around and ask for a written estimate of the total charges, including commission, advertising and VAT. A solicitor will either advertise and market your property or register it with a local solicitors’ property centre. Some solicitors may charge a lower commission or offer a package to cover selling and conveyancing for your sale and also your purchase, so you should shop around and ask for estimates. If you engage a solicitor, they must write to you at the earliest opportunity with an estimate of the total fee, including VAT and outlays, or the basis on which the fee will be charged.
Fixing a closing date If enough people formally notify your solicitor or estate agent that they are interested in your property, you can fix a closing date, which is the time and date by which formal written offers must be given to your solicitor. If you use an estate agent, the offers will usually be sent to your solicitor. If there is little interest, or the market is very quiet, you will have to decide how long to wait for expressions of interest to gather or whether to let it be known that you will consider an individual offer.
Offers You do not have to accept the highest offer, or indeed any offer at all. Usually, the offer will include conditions to suit the person making the offer. These would include the date of entry, any items to be included in the price and technical conditions based on, for example, the information in your property questionnaire and any associated planning permission, building control consent, guarantees and warranties. If the highest offer comes with conditions you don’t want to accept, then your solicitor will find out whether there is any room for negotiation. If there is not, you will have to decide whether to accept one of the lower offers or re-advertise.
The missives When you have decided, your solicitor will issue a letter known as a qualified acceptance, which states that you will accept the offer as long as certain conditions are changed. Usually, there will then be an exchange of letters (missives) in which your solicitor will try to vary any unacceptable conditions. When both sides agree, the exchange ends with a concluding missive making a binding agreement between you. Once the missives are concluded, your solicitor will: do the conveyancing, which is the legal transfer of the title (ownership) from you to the buyer agree the disposition (the document that transfers the title of the property from you to the buyer), which is drafted by the buyer’s solicitor, and if you have a mortgage, arrange for the repayment and discharge of your loan over the property. Just before the settlement, you should sign the disposition and arrange to hand over the keys.
Costs The costs of selling your home include your estate agent’s or solicitor’s commission and marketing outlays and your solicitor’s conveyancing fees and outlays. If you are buying another home, some solicitors may charge a lower commission or offer a package to cover selling and conveyancing for your sale and also your purchase.
Information on complaints about solicitors is available from The Law Society of Scotland, 26 Drumsheugh Gardens, Edinburgh EH3 7YR Phone 0131 226 7411 Regulation liaison department helpline 0845 113 0018 Email firstname.lastname@example.org, Website www.lawscot.org.uk/Public_Information For information about the services provided by solicitors, details of local solicitors who do conveyancing work, and solicitor standards, contact the Law Society of Scotland at the address above or at Website www.lawscot.org.uk Information on the Property Ombudsman scheme is available from The Property Ombudsman Beckett House, 4 Bridge Street, Salisbury, Wiltshire SP1 2LX Phone 01722 333306 Email email@example.com Website www.tpos.co.uk Information on the Surveyors Ombudsman Service is available from The Surveyors Ombudsman Service PO Box 1021, Warrington WA4 9FE Phone 0330 440 1634 or 01925 530270 Textphone 0330 440 1600 or 01925 430886 Email firstname.lastname@example.org Website www.surveyors-ombudsman.org.uk The National Association of Estate Agents can be contacted at Arbon House, 6 Tournament Court, Edgehill Drive, Warwick CV34 6LG Phone 01926 496800 Email email@example.com Website www.naea.co.uk to find local members. To make a complaint about a member, contact the Compliance Officer at the above address, or Email firstname.lastname@example.org
This guidance is taken from the third edition (2009) of Moving Home in Scotland by Derek MansonSmith, which is a more detailed guide to the home buying and selling process, including information on mortgages. It is published by The Stationery Office for Consumer Focus Scotland and is available for £3.95 from bookshops or from the Stationery Office