The process of buying your first home
Looking to buy your first home but unsure about the process? In this blog, Sara Jalicy, Partner at Anderson Strathern, provides a general overview of the process of purchasing a residential property in Scotland.
If you are looking to buy your first home, then make sure to enter our first time buyers' prize draw to be in with a chance of winning £3,000 towards your deposit. Enter now at espc.com/win
Making an offer pricing
Many properties in Scotland are marketed at an ‘offers over’ price. This generally means that the seller is hoping to secure a sale price above the amount quoted. In general, the asking price will be lower than the valuation figure to encourage viewings. If a property is advertised as ‘Fixed Price’, the first person to offer that price will secure the property, subject to additional terms and clauses. These are the two most common terms but there are various other terms including offers around, offers in the region of, guide price and more.
Noting interest
If you are interested in purchasing a property, you should engage an ESPC agent who will formally note your interest with the seller’s estate agent. This confirms your serious interest in the property, so you will be kept informed of developments.
Closing Date
It is not unusual for a closing date to be set for the submission of offers when there is a lot of interest in a property. Each interested party submits a written offer through their solicitor on an appointed day and time. All offers, and their conditions, will then be considered by the seller. Normally, you will hear the result of your offer on the same day, although it might take slightly longer. The seller is expected to accept or decline any offers as submitted and no further negotiates on price should be discussed after the closing date. It is worth noting that a seller is not obliged to set a closing date or to accept the highest or any offer at a closing date.
Offering
In Scotland, a formal offer for property must be submitted by a solicitor. The offer will include your details as well as the purchase, the price, the date of entry, details of any extra items to be included in the sale, and the standard legal terms to complete the conveyancing. The offer may be ‘conditional’ on certain requirements, e.g. securing your financing. The offer will refer to the Scottish Standard Clauses, which are 30 clauses that form part of the contract for the purchase. They are widely accepted as being fair to the seller and purchaser and cover all the legal requirements and allow for the appropriate checks to be made to ensure you get good title to the property.
When a property is marketed in Scotland, it is a legal requirement that the seller must provide a Home Report which includes a Single Survey, Mortgage Valuation and Energy Performance Certificate. In advance of making an offer, your solicitor will review the Home Report with you and discuss the benefits of requesting additional reports/surveys.
The conveyancing process
If your offer is verbally accepted, the seller’s solicitor will send your solicitor a formal acceptance, called a ‘qualified acceptance’, which may include ‘qualifications’ in response to the conditions of your offer. Your solicitor will discuss the acceptance with you and negotiate on your behalf with the seller’s solicitor. The offer, acceptance and any subsequent letters, which are intended to be part of a legal contract, are known as the ‘missives’. When the final acceptance letter is issued, missives are said to be ‘concluded’ meaning the purchaser and seller have entered into a legally binding contract and cannot withdraw from it without penalty. Your solicitor will advise you when the missives are concluded and send you a copy of the full contract.
The offer and Standard Clauses allow your solicitor time to check all the legal details to ensure you get good title to the property. This includes checking the title deeds for any restrictions in use or obligations; ascertaining that any previous alterations and/or additions have been properly certified; whether there are any planning applications that may affect the property; and so on. The seller is obliged to provide certain property searches which confirm various details about the property.
Settlement
Settlement takes place on the date of entry, as provided for in the missives. The purchase price is paid to the seller’s solicitor in exchange for the disposition (the legal document that will transfer ownership of the property from seller to purchaser), title deeds, other documentation and the keys to the property. It is very important that your funding is in place well in advance of the date of entry. Your solicitor will calculate the balance required for settlement, including any Land and Buildings Transaction Tax and fees due. You will be asked to transfer the funds to your solicitor, and they will liaise directly with your mortgage lender to arrange for the funds to be transferred in advance of the date of entry.
You should check that the property is in good order and if there are any discrepancies, you should advise your solicitor as soon as possible. You have five working days to report any issues to the seller. Your solicitor will also arrange for Land and Buildings Transactions Tax to be paid and will send the disposition for registration in the Land Register. Once the disposition and all relevant documents have been registered, they will be sent to your mortgage provider, or to your solicitor for safe keeping. Your solicitor will send you a copy of the Land Certificate, which is your title to the property.
Find out more
For more information, have a look at our first time buyers guide' or pop into our Property Information Centre to talk to one of our experts.
Win £3,000 for your first home deposit
If you are planning on buying your first home, ESPC are here to help with our latest prize draw! One lucky person will win £3,000 towards the deposit of their first home. Enter now at espc.com/win
