How To Buy A House In Scotland
One of the questions we are most frequently asked is quite simply “how do you buy a house in Scotland?” We asked David Corrie - head of Estate Agency in our Castle Douglas office – to explain the process of buying a house in Scotland to potential buyers from the rest of the UK.
Scottish estate agents, particularly those in Dumfries & Galloway and the Borders, are often asked by people in England (and indeed by those from even further afield) how exactly you go about buying a house in Scotland. There is a perception that the Scottish buying process is very different to the English system. Well, yes and no!
The major difference to grasp is that whilst negotiations to purchase can take place verbally with the seller or their agent, the formal offer to purchase must be submitted on behalf of the buyer by a Scottish solicitor. It is this offer that forms the basis of the contract, in the same way that it would in England and Wales.
Scotland has a separate legal system from England and Wales and under the Scottish system it is the responsibility of the buyer’s solicitor to ensure that the buyer has both the financial means and the practical ability to purchase the property. It is different from the system in England where the buyer makes an offer without the support and advice of their lawyer and can subsequently discover some time later that they do not have the means or ability to purchase the property meaning wasted time money and effort for all concerned.
So far so good?
One ‘myth’ which people often believe to be true is that in Scotland this offer is contractually binding. This misconception is based on the historical process. In the bygone days, Mr MacDonald agreed formally through his lawyer to buy a cottage at the end of the lane from Mr Campbell for a shilling, two goats and a one legged chicken (prices were reasonable then..) and the deal was done.
But this was all in the days before planning permissions, environmental searches, damp and mortgage surveys. Nowadays these must all be investigated before an offer can be deemed binding. Today, the offer is seen as a basis on the start of a contract and a moral understanding that the purchaser is committed to buy (unless there is a real disaster or problem with the subsequent legal, survey or finance conditions.)
This point in time when the buyer is contractually bound to purchase and the seller to sell is called ‘Exchange of Contracts’ in England and Wales and 'Conclusion of Missives' in Scotland. This is essentially the same thing by two different names.
In 2009, Scottish Home Report Surveys & Valuations (or Home Reports) were introduced. Paid for by the seller they provide potential buyers with a basic home buyers condition survey, an Energy Efficiency Rating (EPC) certificate and, importantly, a valuation of the property. This valuation is carried out shortly before the property is put to the market and is the professional opinion of a Chartered Valuation Surveyor.
This valuation - which can be relied upon for mortgage purposes – is valid from 12 weeks of the date of survey. Beyond that the value may have fluctuated too far for the Bank to make a mortgage lending decision on (like any other asset of investment.) However in the current market it would be unfeasible to update this every 12 weeks, so the most likely scenario is that the price is updated post negotiations to purchase at the expense of the seller who first provided the report.
To summarise, the system is broadly the same in process, but not procedure. In order, what happens is:
- Seller decides to sell
- Seller pays for Home Report to completed
- House goes on Market
- Purchaser decides to make an offer
- Offer Negotiations
- Formal Offer through a Scottish solicitor
- Conclusion of Missives (the exchange of contracts)
- Completion - called ‘Date of Entry’ in Scotland
All of our CKD Galbraith residential agents will be happy and able to advise you on more specific details of the process should you wish. We are happy to discuss with buyers at an early stage so if you have any reservations or queries do get in touch!