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Buying or Selling a House in Scotland
It has long been a recognised fact that the process used for house purchase in Scotland differs from that used in England. But how different is the Scottish system? Does different necessarily mean better, or simpler?
The house purchase system in Scotland, like that of England, is there to protect both the buyer and the seller and make sure that neither gets a raw deal. In many instances, houses in Scotland will be sold by a solicitor rather than an estate agent and most cities and large towns will have a Solicitor’s Property Centre. This acts as a hub for the local solicitors, displaying their properties for sale on their website or shop window a service for which they will be paid a fee, normally paid by the seller of the property. Sellers also have the option to use one of the many estate agents, operating in Scotland, both will sell houses on behalf of their clients. Regardless of who is selling your house, the same criteria must be met while carrying out research in the marketplace as to who performs best at selling property on a local basis.
One of the first things the seller’s solicitor or estate agent must do is to organise and make available to any prospective buyer a Scottish Home Report. This is a document, paid for by the seller. That tells a prospective buyer what they need to know about the house and is split into three parts;
A building survey and valuation – This will have been carried out by a Chartered Surveyor, who will visit the property and do a visual check on its condition. He will also highlight any potential problems with the property as well as putting a valuation on your prospective new home.
A property questionnaire – This is a 16 part questionnaire giving information on;
- Length of ownership – How long have you owned the property?
- Council Tax band - Which Council Tax band is the property in?
- Parking arrangements – Is there off-street parking, allocated parking space, garage, etc.?
- Is the property in a Conservation Area?
- Is the property a Listed Building?
- Alterations or Extensions – Have any structural alterations or extensions been added – if so has the correct permissions been granted?
- Central Heating – Details of the type, age and condition of the heating system.
- Energy Performance Certificate – If yes, how old?
- Issues affecting the property – historical weather related or structural damage?
- Services – Gas electricity, water, drainage, etc.?
- Common areas - any responsibility to contribute to the cost of repair of a shared drive, private road, boundary fences/hedges, or communal garden area?
- Charges – Are there any additional charges for property management or insurances?
- Specialist reports - has the property had any treatment work for dry rot, wet rot, damp or any other specialist work?
- Guarantees – Are there any guarantees issued against such work
- Boundaries – Have there been any alterations to the boundaries of the property?
- Notices affecting the property – Have any notices been issued that would require you to carry out any remedial work to the property or has any notice been issued to inform you of any proposed development which would affect your property
An energy report (EPC) – This gives information regarding the energy efficiency of the property and gives advice how to improve it.
Some homes in Scotland are advertised for sale at a fixed price, but most are sold by a bidding system. This means the seller’s agent will offer the property to the market for a specific price and ask potential buyers for offers, either over or around that price.
Initially, a prospective buyer will ask their solicitor to send a ‘note of interest’ to the seller’s solicitor to indicate that an offer is pending. If a number of ‘notes of interest’ are received, the seller may decide to set a closing date for offers. Any offers made to the seller’s solicitor should be made in the form of a letter from the solicitor representing the prospective buyer and should contain any conditions the buyer may wish to add to their bid. As well as the price being offered, these would normally include, a proposed date of entry, any items such as, carpets, curtains, light fittings or white goods to be included in the sale and any other conditions the prospective buyer might wish to add. It is not unknown for an offer to be made subject to a satisfactory survey of the property.
Assuming that more than one offer is received for the property, the seller is under no obligation to accept the highest offer, or for that matter any of the offers tendered. Having decided which offer to accept, the seller’s solicitor will issue a letter, known as a ‘qualified acceptance’ of that offer, which will say that that offer is accepted, often with certain conditions attached. If for instance, the bid is ‘subject to a satisfactory survey’, the acceptance may give a time limit on that survey being carried out and the date of entry may be unsuitable. The two solicitors will now negotiate the conditions of the offer and the acceptance, until an agreement is reached. Once agreement is reached and the offer is accepted unconditionally, a binding contract has been reached. That offer cannot now be withdrawn nor any other offer be accepted.
If only one ‘note of interest’ is received, the prospective buyer is free to negotiate a selling price with the seller.
At this stage, the solicitors will undertake the conveyancing process, at the end of which, they will oversee the exchange of monies and keys and the property will officially change hands.
The Scottish system does not allow buyers to suddenly pull out of a deal without potentially being liable to pay the seller thousands of pounds in compensation. That being the case it is extremely rare for a buyer to pull out of a deal. Nor does it allow other buyers to lodge a higher offer, thus killing an existing, agreed sale. This removes the problems and worries of ‘gazumping’ and break downs in the buyer/seller chain, which cause so many sleepless nights in England.
When a sale is agreed in Scotland, it is a binding contract and that to me, is simpler and better.
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