Whether it’s your first or fifth time, buying a house can be a nail-biting time, often exacerbated by the need to navigate a legal process with which you are not au fait. Here, Debbie McCathie, Head of Residential Conveyancing at egg partner Gilson Gray, seeks to take away the unknown by taking you through it - step by step - so you can embark on buying a home with confidence.
“Any eggs looking to buy a house or flat in Scotland need to follow the same legal process,” says Debbie. “Property transactions in Scotland can take anywhere between six to twelve weeks to complete (perhaps longer if you are part of a lengthy chain or if you are buying a new build property). This is not long in the grand scheme of things, but during that time it can feel like there are endless administrative hoops to jump through. It helps to know what to expect - and what the main legal jargon means - so it doesn’t overwhelm.”
Property pictured above - 27/1 Harden Place, Edinburgh EH11 1JD
The Paperwork
First up is getting a Mortgage in Principle from a bank or mortgage lender. This is simply an indication of how much they are willing to lend you.
There will also be ID and Money Laundering Checks so that the solicitor can verify who you are and where your money is coming from for the purchase. You need to be prepared to provide detailed information about the source of your wealth and the source of your funds plus share information on any third parties who may be helping with your deposit.
The Price
Some homes in Scotland are sold at a fixed price, but most are sold through a 'blind bidding' system - this means the seller will ask for offers over a minimum price. How much you'll have to pay, then, is down to you but is influenced by how many other people are interested in the same property.
If the home you want to buy is a new build, however, the process of buying is a little different as most are offered by the builder at a fixed price. Most builders have a standard offer form for buyers laying out the conditions that you'll need to agree to if you want to buy the house. You should arrange a loan and take legal advice before you accept the builder's offer, because once you do it becomes a legally binding contract. Your solicitor will advise you on the terms of the builder’s offer prior to you accepting it.
The Home Report
If you find a home you're interested in on the open market, you’ll be sent a Home Report by the seller’s estate agent or solicitor. This is a document that tells you what you need to know about the house. It's split into three parts –
1. A single survey and valuation
This section, based on an inspection carried out by a chartered surveyor, is the biggest part. It’s tempting to skip through to the bottom - where the valuation is listed - but read with care as it tells you about the home, its condition - and crucially - any repairs you may need to carry out. In an ideal world you need to get estimates for how much any remedial works will cost before proceeding too – and also consider the upheaval they’re going to cause you.
2. A property questionnaire
This section of the Home Report is a questionnaire covering 16 different categories from the council tax band to details of any specialist works that have been carried out. The questionnaire is your opportunity to read about the seller’s own personal knowledge of the property, and this is the only platform for you to find out, for example, who the utility suppliers are - so you should read through this carefully too.
3. Energy report
Interested in how much energy you’ll burn through in this property? Read this section as it gives you a good indication of how much you’ll spend on heating, lighting and that all-important morning shower. This should feature in your sums when calculating how much to offer on a place.
Property pictured above - 9 Gamekeeper's Park, Edinburgh EH4 6PA
Noting Interest
If you’re happy with what you’ve read, you need to view the property. As good as the estate agent’s images and videos can be, there’s no substitute for going in person. Is it the one for you? If so, tell your solicitor who will then formally 'note' your interest with the seller. This indicates your intention to put in an offer when the time comes but also your desire to be kept up to date on what’s happening.
Whilst the note of interest may dissuade the property being sold to someone else in the meantime, it doesn’t legally prevent it. However, in most cases when considering an offer, the seller will give interested parties the chance to offer.
Offer
Once a number of people have noted their interest, the seller will set a closing date for offers to be made. This is the deadline they set for your team to submit your offer in writing so that they can review all offers submitted and make a decision.
Your written offer should include the following parts – a short description of what you’re buying, the date you’d like to get the keys, the price you’re agreeing to pay, any items you’d like from the seller along with any other conditions you might have. Your solicitor will advise you on everything you need to consider including in your offer. . Your written offer will also incorporate a set of standard conditions known as the “Scottish Standard Clauses” which set out the terms of purchase and which adopt a consistent approach for all residential conveyancing transactions.
The seller will in most cases accept the highest offer although other factors can sway a decision - namely what position you’re in in terms of having sold any other properties required for the purchase and when you need entry.
If there's no closing date set, this could mean nobody else has noted their interest so you might be able to negotiate a price with the seller.
Offer Accepted
Your offer has been accepted – a cause for celebration, but also time for your legal team to get on with next steps.
The Missives
A verbal acceptance of your offer will be followed up by a written acceptance called the ‘qualified acceptance’ detailing any changes the seller wishes to make to the conditions in your offer, including the Scottish Standard Clauses.
The seller's solicitor and your solicitor will then send each other letters negotiating these conditions. During this part of the process you would expect both sets of solicitors to negotiate on matters such as the requirement for sellers to provide Local Authority consents for alterations to the property or the need for funds to be retained by your solicitor at settlement should there be any outstanding repairs to the property.
This correspondence is called 'missives' and although there are certain ethical requirements to honour a verbal agreement, you can legally pull out of the purchase at this stage. Only when the missives are eventually ‘concluded’ are you in a legally binding contract to purchase the property. Your legal team will tend not to conclude missives on your behalf without taking your clear instructions to do so and will strongly advise you against doing so until your mortgage offer has come through or missives are concluded on any dependent sale that you have.
Conveyancing
Alongside the process of progressing the missives, your solicitor will have started the 'conveyancing' - the legal transference of ownership from the seller to you.
As part of this process, your solicitor will inspect the property’s title deeds - a series of documents proving the ownership of a property and its owner history. They’ll conduct a number of checks including making sure that the seller actually owns the home and if there are any ‘burdens’ or legal limitations on your new home such as a restriction against ever using it as a commercial property or sub-letting it, or against erecting any buildings on land attached to the property or being able to sell a parking space separately from the property.
The Settlement
You’ve made it to the legal finishing line. The last step in buying a home is the 'settlement'. This is when you get possession of the home, and usually happens on the agreed date of entry.
Around a week prior to settlement, your solicitor will confirm to your mortgage lender (if you have one) that they are satisfied with the title deeds to the property which will trigger the release of funds from your mortgage provider. Combining this with your contribution, they will transfer the purchase price by electronic bank transfer to the seller’s solicitor upon settlement. You in turn will get the 'disposition' (the document that transfers ownership from the seller to you), the deeds and the keys.
For a purchase where you require a mortgage, you will also need to sign a ‘Standard Security’ before the date of entry. This is the deed - or legally written document - that is prepared for the lender (the bank that is issuing your mortgage) and after the transaction is completed will be registered against the property with Registers of Scotland to secure the mortgage against the property.
Registration
As part of the sale your details will be added to the land register. This is a register of who owns land and property in Scotland.
Phewph after all of this you are now the proud owner of a new property!
For more information on home-buying, selling or renting across Scotland, visit gilsongray.co.uk or email [email protected]. You can also call their women-strong team on 0131 516 5366.
All eggs can benefit from 10% off residential conveyancing fees. So, if you’re looking to buy a property, just quote 'egg' when you email. All egg members also receive a whopping £400 discount on houses valued up to £400k, and a further 10% discount on values thereafter. Landlords receive 50% discount off management fees for 12 months if you're a paying member, 25% off for non-paying egg members. For all enquiries and valuation requests please email [email protected]. Free online valuation here.