Purchasing Residential Property in Scotland: A Guide

The system for purchasing residential property in Scotland is different from other countries in the UK. Here is a brief guide to the process so you know what to expect when buying a property in Scotland.

Most properties are marketed as “offers over” a price. This means that the seller is hoping to sell for above the price noted. Generally, this “offers over” price will be lower than the Home Report Valuation. This is designed to generate interest in the property, encourage viewers and also offers.

Occasionally properties will be marketed at a “fixed price”. This is often used when the seller is looking for a quick sale or if the property has been on the market for some time with no one expressing a strong interest. It doesn’t mean there is anything inherently wrong with the property, it’s just a reflection of the seller’s specific circumstances.

Generally, before you start looking seriously at purchasing a property, you want to know your total budget. A key part of this is obtaining a quote for solicitors fees and outlays. Please feel free to contact us for a free, no-obligation quote. We’ll always be happy to talk you through the process and answer any questions you have.

If you are interested in a specific property you should contact a solicitor to put in a note of interest. This doesn’t commit you to buying the property or even submitting an offer however it shows you have serious interest in the property. The Estate Agent will then keep you informed, through your solicitor, going forward. A typical example would be notifying you if a closing date has been set.

When a property is put on the market in Scotland the seller must provide a Home Report. The Home Report is compiled by a Surveyor and includes details on their opinion on the condition of the property, a valuation and also an Energy Performance Certificate. Depending on the information contained in the Home Report, you may wish to instruct an independent more detailed survey report or further specialist reports. Your mortgage lender may require an independent report to be carried out, the mortgage valuation is contained within the Home Report. If it is more than three months old, the valuation will need to be ‘refreshed’ and in some cases the lender may want to instruct their own valuation

To submit a formal offer you need a solicitor to act on your behalf. Offers include your details as the purchaser, the price, date of entry, details of any additional items included in the purchase price and the Scottish Standard Clauses required to complete the conveyancing. The offer may also be conditional upon you securing your mortgage offer or selling your existing property if you have one.

The Scottish Standard Clauses, are 35 clauses that form part of the contract for the transaction and are included in all residential conveyancing transactions in Scotland. The latest edition is the product of many years of negotiation and agreement between conveyancing solicitors. They are accepted as being fair to both the seller and purchaser and cover all the legal requirements whilst allowing for the appropriate checks to be made to ensure that you get a good title to the property.

Where there is a number of parties interested in a property the seller will often instruct the estate agents to set a closing date. Each interested party can then submit an offer through their solicitor on a set day at a set time. The seller then considers all offers they have received. They don’t have to accept any of the offers however they usually accept the one they are happiest with. Generally, this is the highest offer but not always. The seller may consider offers from purchasers who do not need a mortgage or don’t have a property to sell as more favourable. Normally you get confirmation if you have been successful or not on the same day.

If your offer is accepted, the seller’s solicitor will send your solicitor a formal acceptance, which includes qualifications to the conditions in your original offer. This is known as the Qualified Acceptance. Your solicitor will discuss the terms of this with you and then, if required, negotiate with the seller’s solicitor further. Your offer, their Qualified Acceptance and any subsequent formal letters form the contract for the transaction known as the missives.

When the final formal letter is issued, missives are concluded. This means that you and the seller are in a legally binding contract and cannot change your minds and withdraw without penalty. It is common for missives not to be concluded until close to Settlement and the Date of Entry.

Whilst there is negotiation over the missives your solicitor will also check all the legal details to ensure you will receive a good title to the property. This will include checking the title deeds, ensuring any alterations have the correct paperwork, enquiring whether there are any planning applications that might affect the property. This information is obtained from the searches the seller’s solicitors provide along with replies received to observations on title that your solicitor will raise with the seller’s solicitor.

You can expect to receive an explanation of the titles from your solicitor once this process has been completed to ensure you are happy with the title you purchase and highlight any important issues before proceeding.

It is essential that your funding is in place prior to settlement. Your solicitor will calculate the balance required for settlement including any Land and Buildings Transaction Tax (LBTT) and fees due. Before you can transfer the balance, your solicitor will ask you to comply with Anti-Money Laundering checks such as providing bank statements to prove the source of your funds. Once this has been done you then transfer the funds to your solicitor. If you have a mortgage, your solicitor will also contact the lender directly to arrange receipt of the funds from them before settlement.

Settlement takes place on the agreed date of entry. Your solicitor sends the purchase price to the seller’s solicitor in exchange for the signed disposition (the legal document transferring ownership), the title deeds and keys to the property.

As soon as you get your keys and get to your new property you should check that the property is in good order, that any of the fixtures and fittings included in the price are present and that all the main systems such as the central heating are working correctly. If there are any issues then you should notify your solicitor as soon as possible as you only have 5 working days to report that the systems are not working correctly.

Your solicitor will arrange to pay any LBTT due and will arrange for the disposition in your favour to be registered with Registers of Scotland. Once the title has been updated a copy will be sent to you for safekeeping.