Property
The rules for buying a property are different in Scotland from the rest of the UK. Here we explain exactly how the process works.
- The solicitor/estate agent
- Personal interest
- Property particulars and viewing
- Home report
- Making an offer
- Other service
- Mortgages
- Surveys and valuations
- Legal advice
- If things go wrong
In Scotland, home sales have traditionally been mediated by solicitor estate agents, who both market the home and handle the conveyancing. Both solicitor estate agents and non-solicitor estate agents can help you to buy or sell your home.
Both solicitor estate agents and estate agents help potential buyers find property and negotiate the sale.
Many offer or recommend additional services such as arranging mortgages, surveys and conveyancing. You do not have to accept your agents recommendation – you can shop around and may be able to get a better deal. The agent must treat all buyers fairly regardless of whether you have purchased additional services. For example, you should not be treated differently because you do not arrange a mortgage through your agent.
Usually, solicitor estate agents and estate agents work for sellers. Sellers are the clients. They pay the fees and the agent puts their interests first. But agents must treat buyers fairly. If a buyer pays an agent to find a house, the buyer is the client. An agent may not accept commission from both the seller and the buyer in the same transaction.
Using an agent can be a complicated business, so it makes sense to know your rights, what the potential pitfalls might be and how to get problems sorted out.
Solicitor estate agents and estate agents provide advice and property details to buyers. But the agent's main concern is to get the best deal for the seller, who is the client (as a buyer, you are the client only if you are paying an agent to find a property for you). An agent cannot act for both parties.
Remember that solicitor estate agents and estate agents may be in a position to benefit personally from the sale of a property. You must be told promptly, and in writing, if your agent, or a relative or business partner of the agent, owns the property you want to buy.
Property particulars and viewing
The estate agent can provide a written description of the property (known as property particulars). This will give you an idea of what a property is like. It is against the law for a solicitor estate agents and estate agents to make false or misleading statements about a property. If the particulars say the property has double-glazing and loft insulation, it should have these features.
If there are terms in property particulars you do not understand, ask for an explanation.
If you think you might be interested in buying a property, the next stage is to go and see it. The estate agent cannot charge you for arranging a viewing or showing you round the property.
Since December 2008 sellers are legally required to commission a 'Home Report' before they put their house on the market. The Home Report can help you to decide whether to make an offer for a property, and if so how much to offer. Sellers must provide potential Buyers with a copy of a Home Report within nine calendar days of request.
The Home Report has three parts:
- A single survey and valuation
- A property questionnaire
- An energy report
Once you have found a property you like the look of and looked at the Home Report for the property, you then notify the seller of your interest. Your solicitor will need to submit a 'note of interest' to the seller's solicitor or estate agent.
To proceed with the transaction, your solicitor must make a formal written offer for the property on behalf of the buyer. The offer to buy and the seller's acceptance must be made through their respective solicitors. This takes the form of an exchange of letters known as 'Missives'.
If a number of buyers express interest in the same property, the sale is generally conducted through a sealed bid process. The seller's agent will set a time and date (the 'closing date') for offers to be made. This allows potential buyers to arrange finance for the transaction. It is not always the highest offer which wins. The seller may, for example, sell to the person who can proceed with the sale most quickly.
Details such as the price and date of entry will be included in the offer. The offer may also include various conditions such as requiring that there be no terms in the title deed affecting the property, as well as details of items which the buyer wants to be included in the transaction.
Often the seller will respond with a qualified acceptance, agreeing to some terms in your offer but not all of them. You and the seller can negotiate, but once there is a complete agreement in writing, there is a binding contract. Until missives are concluded, either the buyer or the seller can withdraw without penalty.
Once these conditions and any qualifications have been agreed between the solicitors, a formal letter of acceptance is sent and the Missives are 'concluded'. At this point there is a binding contract between the buyer and the seller.
If you cannot fulfil the obligations set out once the missives have been concluded you may be liable to pay the seller thousands of pounds in damages.
Your solicitor then proceeds with the conveyancing, which is the legal process for investigating and transferring legal title from the seller to the buyer. Your solicitor also drafts the 'disposition', which is the legal document actually effecting the transfer. This must be agreed with the seller's solicitor.
You may also purchase other services from solicitor estate agents and estate agents. For example, they may organise surveys and valuations or arrange mortgages or life insurance. This is common when an estate agency is part of, or linked to, a financial institution such as a bank or a building society. You do not have to accept your agents' recommendation – you can shop around and may be able to get a better deal.
There are a number of ways to find a mortgage. Shop around, for example, at banks and building societies. Or go to an independent financial adviser who will be able to tell you what's available.
Solicitor estate agents and estate agents can also give advice and may offer to arrange a mortgage for you. You do not have to take up this offer.
A mortgage is a large, long-term debt. You could lose your home if you can't keep up the repayments.
Think carefully before taking on a mortgage.
Before giving you a mortgage, the lender will get the property valued.
The valuation helps the lender, but you may want more information from a home buyer's survey. This is a more detailed inspection of the state of the property. You could ask the valuer to draw up a home buyer's report while preparing the valuation for your lender. Or you may prefer to use a valuer who is not in contact with your lender.
You might want to get, or the lender may require, a full structural survey. This tells you whether the property is sound or whether major repairs are needed. A full structural survey should be carried out by a qualified and independent surveyor.
To find a surveyor or valuer, ask friends and relatives if they can recommend one. If not, look for details in the phone book or ask in your local library. If you want to use a surveyor or valuer who is a member of a professional association look for the letters ARICS or FRICS or get details of members through the Royal Institution of Chartered Surveyors.
If you are buying a flat, you will probably be partly responsible for the upkeep of common parts of the building, such as stairways, roof and garden. Ask your surveyor to check the whole building as well as the flat. Does the building need, or has it recently had, major repairs such as redecoration, or a new roof or a lift? If so, will you have to pay a share of the costs?
Ask about the property management company, if there is one, what its terms and conditions are, what the annual fees are and what the typical ad hoc maintenance costs have historically been.
The cost of a home buyer's survey and valuation or a full structural survey will normally be based on the value of the house.
You can do the legal side of buying a property yourself. There are books on do-it-yourself conveyancing in your local library. However, legal advisers know the problems that can arise, can ask the right questions and are insured against making mistakes.
Fees vary and it pays to shop around. Try the phone book or ask around. If you are using an agent, they may be able to recommend a legal adviser.
Do not use the same legal adviser as the seller.
In relation to solicitor estate agents, the Scottish Legal Complaints Commission (SLCC) deals with complaints from consumers about services provided by solicitors. The SLCC will pass complaints alleging professional misconduct or unsatisfactory professional conduct to the Law Society of Scotland (LSS) for investigation.
The SLCC also has a general power to oversee how the LSS and profession deal with complaints. If a complainer is unhappy with the way the LSS deals with the complaint, they can complain to the SLCC about the ‘handling’ of it using the following link: www.scottishlegalcomplaints.org.uk
In relation to estate agents, all estate agents engaging in residential estate agency work must belong to a redress scheme approved by the Office of Fair Trading.
This means that actual and potential buyers and sellers of residential property with complaints about estate agency work will be able to use a free, easily accessible, and fair estate agents redress scheme, which will have the power to make a range of awards, including requiring a member to pay compensation. There are currently two approved schemes, operated by The Property Ombudsman and the Surveyors Ombudsman Service.
Further information on the redress schemes can be found on the OFT website.
