Research shows that although it started as a way to keep staff safe at the start of the pandemic, remote working may be here to stay. It can make for a better work/life balance by allowing people to live further from their workplaces without the need for the daily commute.
As a result, we are experiencing a significant increase in the number of enquiries from people looking to move from cities and towns in England to rural areas in Scotland.
Although similar, there are a few differences in the Scottish buying process. Below are some pointers to guide you;
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 buyer’s 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 brought 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.). If the marketing period goes beyond 12 weeks 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.One of the major differences 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. When a buyer is seriously interested in a property they will ask their solicitor to note interest. This ensures that the agent and seller know their interest is genuine and that they are likely to make an offer. When noting interest in a property, a buyer’s solicitor will ask how many other notes of interest there are on the property. The more notes of interest, the higher the level of competition and the more a buyer is likely to have to offer to secure a property.
Once a seller has two or more notes of interest on their property the estate agent will normally set a closing date. However, the seller isn’t under any obligation to do so. For example, if the seller receives an exceptional ‘pre-emptive’ offer that they think won’t be matched or they decide it has only recently been advertised or if they have a number of viewers booked in who have yet to see the property.
A closing date is simply a date and time, set by the seller’s agent, by which offers must have been received through a Scottish Solicitor from any parties interested in purchasing the property.
Closing dates (or sealed bids) mean that each person submitting an offer does not know details of any other offers that may be submitted. Because of this buyers are motivated to submit their best offer for a property at a closing date. Again, the offer must be submitted by a Scottish Solicitor.
Although generally a seller will be tempted by the highest offer, there are a number of other factors that a seller will consider when picking the successful offer. An entry date that suits the vendor’s next move is one factor. A cash offer is far more desirable than an offer which is subject to either mortgage funding or the sale of another property.
Perhaps the reason for a lower rate of property deals falling through is that Scotland has a separate legal system from England and Wales. 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. In short, proof of funds must be provided to the buyer’s solicitor before they will make an offer on your behalf. 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.
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 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 of 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.
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
- Property goes on Market
- Viewing – this can be virtual, or in person
- Purchaser decides to make an offer Note of Interest and closing date or Offer negotiations
- Formal Offer through a Scottish solicitor
- Conclusion of Missives (the exchange of contracts)
- Completion – called ‘Date of Entry’ in Scotland
We have helped thousands of buyers moving from England and Wales (and further afield) to Scotland and will be pleased to talk you through the process. We always stay in close communication with the purchaser as well as the seller to ensure the process goes smoothly right up to the date of entry and sometimes beyond. If you have a rural lifestyle in mind, please give me a call.