This article from Lawpack's Sell your own Home Kit provides an introduction to the legal process of property conveyancing in Scotland.
The process of buying and selling property in Scotland is different from the rest of the UK. In fact it has many similarities to buying at auction. Properties are either advertised at a fixed price or, if the seller is confident of getting a good price, at 'offers over' a specified sum and a formal tender date is set when all offers must be received.
In Scotland, buyers get their mortgage valuation and survey done before they make an offer on a property. Buyers who miss out on several properties can end up having to pay for a number of expensive surveys.
However, there are advantages to the Scottish system. The price and the date of moving is agreed at an early stage. As a result gazumping and gazundering are almost unheard of.
Fixing the date of moving early in the process means that property sales and purchases do not always take place on the same day, which is why bridging loans are more common in Scotland than in the rest of the country. This involves buyers in extra financing costs and may require the expense and inconvenience of a temporary move to a friend's property or in to rented accommodation, but has the advantage that few sales fall through because of lengthy chains.
Here is a step-by-step guide to how conveyancing works in Scotland:
- A buyer who is interested in making an offer on a property arranges their mortgage offer and gets the property surveyed.
- If the buyer is still interested, they make a conditional offer for the property which as well as including the name and address of the property will include a proposed date for moving in - known as the 'date of entry'. It's called a conditional offer because it has conditions attached to it. These include standard items to ensure that the seller has the right to sell the property and that there are no planning or road schemes in the pipeline which could affect the value of the property. The conditions also cover items to be included in the sale, such as carpets and household appliances; an undertaking that the heating is working; and any approvals for work carried out.
- The offer is only binding if the seller agrees in writing to the offer and all its conditions. In practice this is now rare and there is a fair amount of toing and froing between the buyer's and seller's solicitors over the conditions. The seller's solicitor issues a qualified acceptance, qualifying the conditions in the original offer. The contract only becomes binding if these qualifications are agreed in writing by the buyer. Both buyer and seller can walk away from the deal until the offer becomes binding. The process of arriving at a binding contract is known as 'missives' and usually takes up to a fortnight, but it can be longer if there are many arguments about the conditions.
- The buyer receives the formal mortgage offer and the seller's solicitor sends the buyer's solicitor the title deeds and search reports and any other documents agreed in the conditions of the missives. The seller signs the transfer of the title deed, known as the 'disposition'.
- The buyer arranges his mortgage and his solicitor will prepare the appropriate security documentation and Land Transaction Return for the buyer to sign. He will request the loan funds from the buyer's lender and any balance of the price, fees and outlays from the buyer in time for settlement on the date of entry.
- The keys are handed over on the date of entry in exchange for the purchase price.
- The buyer's solicitor completes the transfer by paying any Stamp Duty Land Tax and arranging for the signed title deed to be registered with the Registers of Scotland.