Buying in Scotland is a different process from England and Wales. Whether it's a fixed price or an 'Offers Over' property, check out the things you need to know and hopefully it will make it a simple one for you to buy.
Whether you're having to think about a closing date or have the option of a fixed price, there's a number of things you really should sort out before you're sat making this decision. Get your ducks in a row so you can move quickly when you're ready to bid.
Before you even start viewing properties it is really important to know what you can borrow and what all the costs will be. Costs can include legal fees, lender fees and also removal costs. When it comes to the mortgage it can be useful to meet with a mortgage adviser to see how much you can borrow based on your salary. Make sure you can afford the monthly repayments.
On the basis of all your number, you will be issued with a decision in principle from a lender. A decision in principle means that a lender will consider a mortgage application from you for the agreed amount.
Special mention should be made of this as the Land and Buildings Transaction tax replaced the UK Stamp Duty Land tax in Scotland in April 2015. The amount applied is proportionate to the actual price of the property. Up to £145,000 you pay 0%, above £145,000 to £250,000 you pay 2%, above £250,000 to £325,000 you pay 5%, above £325,000 to £750,000 - 10%, over 3750,000 you pay 12%.
Appoint a solicitor at this stage so they can be on hand to advise you at all stages of the process. You may have a recommendation from friends or family. You will also find that most solicitors are actually the 'estate agents' for properties also.
This is the exciting bit. Decide on the area you wish to buy in and then look at house buying websites and also visit estate agent. The latter can be helpful as this relationship can help you to be alerted when the right property comes on the market.
Look at online sites like Zoopla and RightMove.co.uk and set up alerts for your area, price bracket, rooms and even special features you want/need included in a new house.
Once you find a property you're serious about, then request the Home Report. A home report is provided free to you as the buyer and you should apply for this ideally before you view the property.
The home report has three elements; the single survey which will tell you the condition of the property, the energy report which gives the property an energy efficiency rating and the property questionnaire which tells you about council tax and alterations and also factoring arrangements and whether there are any local authority issues.
In Scotland, if you want to proceed after you have viewed the property then you need to ask your solicitor to note your interest to the seller’s estate agent/solicitor. You will then be advised of the closing date. A note of interest does not oblige you to buy, it simply indicates your interest.
In Scotland you will see that properties are either fixed price, offers over or offers around. Fixed price means the property could be sold to whoever is the first to offer the asking price, offers over means the seller will usually sell to the highest bidder in a closed offer system and finally offers around means the seller will usually be willing to negotiate. If there is a closing date then your solicitor will prepare your formal offer, sign it on your behalf and submit it to the selling agents.
If the seller has set a closing date and has a number of offers then usually the highest bid will be accepted although that is not always the case. The seller may opt for the people that can move in the quickest for example. You will normally hear a few hours after the closing date. You will then receive a written acceptance called a qualified acceptance.
This stage is all about agreeing the final contract. So discussions will take place around date of entry, items that will be left behind in the house and any other issues that need to be checked out. Once all points are agreed a binding contract, often called missives, will be formed. Neither party can now pull out without having to pay a penalty fine.
Your solicitor will do all this for you and this is where he/she will check all title deeds and other conditions known as ‘burden’, these could include rubbish bins, satellite dishes, walls, fences and hedges, management fees etc.
Your solicitor will plan all transfer documents, you will sign a mortgage document and plans will be put in place to transfer all funds.
Your transaction is said to be ‘completed ‘on the date of entry. Deeds will be delivered to your solicitor, the price is paid to the seller’s solicitor and you finally get the keys to your new home.
Do make sure that you organise any insurance such as buildings and content for when the house is legally yours.
The key differences between buying property in Scotland is that you will firstly notice that solicitors play a more prominent part in Scotland where in effect they are the estate agent. In Scotland the timing of when the contract becomes legally binding is also at a much earlier stage than in England where exchange of contacts doesn’t happen until towards the end of the process. This has led many to often comment that this has reduced gazumping in Scotland.