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If you are new to the property market North of the border, you may be wondering how to buy property in Scotland. Before we have a look at the process for buying a property in Scotland, it is important to note that Scotland has a separate legal system to the rest of the UK. When buying a property in Scotland, you must secure the services of a Scottish solicitor. More...
You have had a viewing and you like the property. At this stage, you should make a ‘note of interest’ with your solicitor. Noting an interest in a property in no way binds or commits you to making a purchase but simply means you must be informed if it is sold to another party.
The seller is likely to set a closing date. At this stage you must decide whether you want to buy the property and how much you are willing to offer. Any other interested parties will of course adhere to the same closing date. Your solicitor will find out the ‘offers over’ figure from the sellers agent. Whatever the figure is, treat it as a rough guide, however if there is significant competition to fight off, be prepared to exceed the figure by 10% - 20%.
When you enter your offer via your solicitor, you will be asked for your preferred ‘date of entry’. A date of entry is the date you will pay and take possession of the property.
After the closing date, offers will be submitted ‘subject to survey.’ (Selling agents usually waste no time in arranging a survey and you can expect one to take place within days.) The sellers will then decide which offer to accept – which is usually the party who offered the most money. Other factors can come into play, however, such as the entry date. In some cases, sellers choose a buyer based on sentimental reasons – but this is rare.
Once your offer has been submitted your lawyer will contact you as soon as the sellers have made a decision.
If your offer has been successful, it will take a week to 10 days for respective solicitors to complete the paperwork. Solicitors will ensure the title is in order and ‘conclude missives’. Missives are formal letters exchanged by solicitors negotiating all the conditions of sale.
Solicitors may negotiate on any of the following:
Only after missives have been concluded is there a binding contract, which you are legally obliged to honour.
Immediately prior to registering the title deeds, (also known as the Disposition) any stamp duty (see what is stamp duty?) on the purchase price must be paid to the Inland Revenue via your solicitor. Gordon Brown, as chancellor, raised the minimum limit for stamp duty from £60,000 to £120,000 in 2005 to help first-time buyers get on the property ladder.
Stamp duty above the limit, is as follows:
£125,000 – £250,000 = 1%
£250,000 – £500,000 = 3%
£500,000 plus = 4%
Once missives have been concluded, your solicitor will be sent the title deeds of the property. On receipt of the title deeds, your solicitor will check everything offered is acceptable. As purchaser, your solicitor will also examine the history of the property, logging the date of each sale and each Security granted over the property, to ensure there are no outstanding charges. Various other documents are also checked, such as Property Enquiry Certificates (to make sure that there are not local authority statutory repairs notices or planning proposals which affect the property) and any building warrants and certificates of completion relating to alterations made to the property.
After examination of the titles, your solicitor prepares the Disposition document transferring the title from the seller to you. The Disposition sets out:
The sellor’s solicitor will recive a copy to make any necessary revisions before your solicitor prepares a final version for seller to sign before date of entry.
Your solicitor will also liaise with your mortgage lender and complete all the loan documentation required as a condition of giving you the money: this involves a Standard Security, the lender’s security over the property.
When the day arrives for you to move into your property, you shall pay the seller via your solicitor. In return, you will be given the keys. This process is known as the settlement.
After settlement, your solicitor will have typed on the Disposition the details of the date on which it was signed, the names, addresses and occupations of witnesses, and will have the Disposition stamped, if required. As purchaser, your solicitor delivers the Disposition and the Standard Security, to the Public Register of Title Deeds.
When registration is complete your solicitor will send the documentation to your mortgage provider.
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