How do I buy a house in Scotland?
Perhaps, as solicitors, we take a lot of what we do for granted when we look after clients who are buying a house. We appreciate that buying a house is probably the biggest purchase our clients might ever make. We also know that it can be a very stressful time, even for those home movers who have bought houses before. So, we thought it would be useful to describe the steps involved when you wish to buy a house in Scotland.
Finding that “right” house
Before going into the legal steps involved once you’ve decided to buy a house in Scotland, we have a few words to say about finding the “right” house. Everyone has their own taste in property so there will never be a question of a “right” or “wrong” house. However, there are a number of factors you need to consider when deciding to buy a house. You must consider the size and style of the house you want to buy and the likely cost in the location where you want to live. Of course, there is the price of the house and the ceiling you have set yourself for the house you want, whether you can afford it. If you need a mortgage to buy the house, how much can you borrow, and will that allow you to buy that “right” house?
You also need to consider if you are in the right catchment area for the schools you would like to send your children to. If you need to go out to work, what are the transport links like? Do you want a garden, and does it have to have a garden office? These are just a few of the things you need to consider when you decide to buy a house, not only in Scotland, but anywhere.
From a legal perspective, your solicitor needs to know you have the money available to buy the house. That is why, if you are obtaining a mortgage, make sure you get a decision, in principle, from your preferred lender before you put in an offer.
Finally, get a copy of the Home Report and read it thoroughly. It is important to understand the condition of the property as assessed by the valuer who carried out the report. You also need to remember that the valuer is an independent professional, so if you have any specific thoughts or worries about anything in the report, it might pay to instruct your own survey.
Once you have found the “right” house, it is time to put in your offer.
Putting in an offer
Your solicitor will take full details of the house you are buying and details of the selling agent. They will ask you about your finances and carry out the necessary anti-money laundering checks. They will answer your questions about the conveyancing process and what happens next.
If there is a closing date on which offers are to be submitted, your solicitor will discuss the price you wish to pay as well as the date of entry when you will take possession of the house. In addition, if there are contents or extras being included, these will be listed in the offer. The offer is then submitted to the selling agent on the closing date. If there is no closing date, there will be a discussion with the selling agent to discover if the price you wish to pay is acceptable to the seller and, if it is, the offer is then submitted.
Negotiating the missives
To buy a house in Scotland, the contract needs to be in writing. Your offer is the first stage of this contract. If your offer is acceptable, the seller’s solicitor will issue an acceptance. Just as the offer you submit will contain conditions, it is very likely that the seller’s acceptance will contain conditions. Your solicitor will discuss the acceptance with you and if the conditions in the acceptance are acceptable, they will then send a final acceptance to the seller’s solicitor and that will conclude the bargain. Solicitors call this concluding missives.
However, there are occasions when the conditions contained in the acceptance which are not acceptable. When that happens, your solicitor will send a further acceptance to the seller’s solicitor, accepting the conditions in their acceptance which are acceptable but modifying or rejecting those conditions that are not acceptable. The seller’s solicitor will then discuss your further qualified acceptance with the seller and, if acceptable, will issue a final acceptance to your solicitor. Alternatively, if your rejection or modification of the conditions in the seller’s acceptance are not or only partly acceptable, the seller’s solicitor will respond to your acceptance with a further qualified acceptance. This exchange of qualified acceptances can continue back and forth until a final acceptance is issued by one party to the other or a point is reached where the parties cannot agree. The important part of this is that until missives are concluded, neither the buyer nor the seller has a contract to buy or sell the house. For further information on missives, please see our article Buying or selling a house: What are Missives?
Examining the title
Whilst the missives process is ongoing, the seller’s solicitor will provide the title to the property for examination. Your own solicitor will check this title and either send you a report on the title or send you a copy of it, or both. In addition, if there is a plan available, your solicitor will likely send you a copy of the title plan. It is important that you check that the title plan compares favourably with the property “on the ground”. You must remember that your solicitor will not have seen or visited the house so will rely on you to consider the extent of the property against the title plan. If you have any doubts about the extent of the property when compared to the title plan or if you have questions about any of the conditions of title affecting the property, please raise these with your solicitor right away.
Your solicitor will also ask the seller’s solicitor to provide a range of reports. When these arrive, your solicitor will examine them and contact you should they contain anything of an adverse nature.
Should there be something in the title or reports which cause your solicitor concern, they will contact you to discuss this and make recommendations to resolve these issues.
The final part of this stage of the process is to prepare the deed that transfers ownership of the property into your name. When it has been prepared, your solicitor will send this to the seller’s solicitor and they will then have the seller sign this in readiness for settlement.
If you are taking a mortgage to assist with the purchase
If you are taking a mortgage to help you buy a house in Scotland, your lender will send your solicitor a set of Loan Instructions. These contain the Offer of Loan they have made to you along with the lending conditions. Your solicitor them prepares a Standard Security. This document must be signed by all borrowers and after the purchase has completed, the Standard Security is registered in the Land Register along with the title in your favour. The Standard Security is the document your lender relies on to repossess the house should you default on your mortgage or otherwise breach the loan conditions.
Once all the borrowers have signed the Standard Security, your solicitor will provide a Certificate of Title to your lender and request the loan funds in time for settlement.
Settling your purchase with the seller
This is, perhaps, the most important stage for you. However, before the actual date of settlement, your solicitor will provide you with a completion statement. This will show the price of the house, the mortgage (if you are using one) and the costs involved. You should send any deposit you have to pay to your solicitor at least seven days before the date or entry. If your deposit is coming from the sale of your current house, your solicitor will discuss the financial practicalities with you in advance of settlement.
On the date of entry your solicitor will send the purchase price to the seller and, in exchange, will receive the deed transferring ownership of the house to you. The seller will also authorise release of the keys to you so you can then move into your new house.
Post settlement matters
When we receive the title from the seller’s solicitor on the date of entry, we pay any Land & Buildings Transaction Tax due on your behalf and then present the deed transferring ownership of the property into your name along with any Standard Security to the Registers of Scotland for registration in the Land Register. We will confirm this to you and when we receive confirmation that your title to the property has completed the registration process, we will also confirm that to you.
Finally, we will provide you with a financial completion statement showing all of the transactions involved in your house purchase.
We appreciate that this is a very short summary of how to buy a house in Scotland. We have covered the main essential points for every purchase transaction.
We have many, many years of experience having bought thousands of houses for our clients over the years. We have experienced solicitors with many years (and sometimes decades) of dealing with house purchase and sale throughout East Lothian, Edinburgh and Scotland. That means if you have any questions about how to buy a house in Scotland or, indeed any question about buying or selling, we will be pleased to answer them. All you need to do is contact us.
If you are thinking of buying a house in Scotland, please get in touch.