We thought it was about time we looked at the process of buying a house in Scotland, where things work slightly differently to England.
One of first steps of buying a house in Scotland is similar to England: the buyer must obtain an “In Principle” mortgage offer. Buyers must also appoint a solicitor; solicitors are generally appointed at an earlier stage than in England – this has the benefit of eliminating gazumping, since once the vendors have accepted an offer they are legally bound to not accept another offer.
Once you have seen a property that you like your solicitor must “note interest” with the seller’s agent. This isn’t a commitment – it simply means that the seller’s solicitor must inform you if anyone else puts in an offer but it prevents the property from being sold without you having had the option to bid.
Another difference between the house purchase process in England and Scotland is the fact that buyers usually have a survey done before an offer is put in on a property. Should a bid be successful, the next stage of the process leads towards a legally binding agreement, so the survey allows you to make sure you’re not going to be bound to something that’s literally on shaky ground. The downside is, of course, that the property can only be sold to one buyer which can leave a lot of people both disappointed and out of pocket.
This “multiple survey” issue is one of the most criticised aspects of the Scottish buying system, and, unsurprisingly, more buyers are opting to submit an offer as “subject to survey”.
Once you’ve decided on the survey issue, the next stage is to put in an offer. Contrary to popular belief, this is not a legal commitment. The Scottish house-buying system operates on an “offers over” basis, where a guide price is given and buyers are invited to offer above it.
Once the buyer has decided on the amount they want to offer, the solicitor will submit a bid on their behalf which will include a financial amount as well as a proposed Date of Entry.
Having a specified date of entry means that both parties are working to a mutually agreed deadline which neither can delay once the offer becomes binding, and this helps to stop the formation of a property chain.
When an offer is accepted, the next stage of the process is known as Concluding the Missives, and is similar to the exchange of contracts in the southern system.
Solicitors on both sides will iron out the fine and final details via a series of letters until a mutual agreement is reached.
To conclude there are points in favour and against the Scottish house purchase process. On the one hand it pretty much eliminates gazumping, which has to be a good thing, and sales don’t get held up in chains, as they do down south.
On the downside, the “offers over” pricing system means that most house sales are, in effect, a closed auction with buyers often resorting to wild over-bidding in an attempt to secure a home. The issue of getting surveys done on properties buyers are interested in can be expensive for buyers.
There are obvious pros and cons for both systems, but it’s still a hot debate as to which is superior!