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Home > Services > Residential & Agricultural Property > Guide to buying
The First Step
The first step should always be to speak to your solicitor. In Scotland, all offers for property should be submitted by solicitors. A verbal agreement or informal offer would possibly be ineffectual but there is a risk that an exchange of letters directly between the buyer and seller could inadvertently lead to a binding contract to the detriment of one or other. The earlier you can contact your solicitor, the more he/she will be able to help you; perhaps by arranging financing, or by negotiating a deal before other parties have had a chance to declare their interest in the property in question, or by giving you some background information on the property which might make you have second thoughts!
Noting Interest
If you are seriously interested in a property, your solicitor will "note interest" on your behalf with the selling agents. In certain circumstances the sellers may be prepared to negotiate with you at this point, or even be prepared to accept an offer submitted on your behalf without the necessity of any prior negotiations. More usually, the selling agents will wait until they have two or more notes of interest before setting a "closing date" for offers. During this period you should not only ensure that financing is available but also arrange to have the property valued and/or surveyed. Again, HBJ Gateley Wareing can advise you on your requirements in these areas.
Closing Date
All the parties who have noted an interest should be informed of the time and date when offers are to be submitted (although please note there is no actual legal requirement for this - a seller may accept an offer at an earlier stage - but the usual practice is to fix a closing date). Your solicitor, having taken your instructions, will submit an offer on your behalf. This offer will stipulate the parties, the property, the price and the date of entry (completion date). In addition, the offer will contain numerous clauses dealing with many aspects of Scottish property law. For instance, an offer for a farm will include clauses dealing with valuation of machinery and crops, environmental issues, common agricultural policy matters, sporting rights etc. An offer for a house or flat will cover matters such as common repairs, services such as central heating, matrimonial homes legislation and others. While there is nothing to prevent you submitting a conditional offer (eg conditional on survey), such an offer is bound to be less attractive to a seller than a "clean" or unconditional offer.
Acceptance of Offer - The Missives
Usually the highest offer is accepted but this does not necessarily have to be the case. Sometimes no offers are accepted. A few hours after the closing date one would normally expect to hear whether one's offer was to be accepted or rejected; this would be followed up in due course by a written acceptance. Your solicitor would discuss with you in depth the written (or "qualified") acceptance, possibly report to you on the title deeds, and having taken your instructions would then revert to the solicitors for the purchasers with a further letter in formal terms. Possibly this letter would be accepting all the points raised in the qualified acceptance; more likely it would be seeking a compromise position. Until such time as all the outstanding points are dealt with to the satisfaction of both parties, the contract (known as "the Missives") remains unconcluded and there is no contractual relationship between purchaser and seller. Even if all the major points are agreed, a difference about a very minor point could upset the entire deal; it is therefore vital - from the point of view of both parties - to conclude the Missives as early as possible.
Titles
Either during the Missives stage, or shortly thereafter, the title deeds will be exhibited to your solicitor who will submit a title report to you, and bring to your attention any important or unusual points. It is your solicitor's duty to ensure that there are adequate rights of access, an unchallengeable title, that the boundaries are clear and correspond to the boundaries on the ground, that responsibility for common parts are properly dealt with, etc. There will almost certainly be title conditions which may or may not be of concern to a purchaser; it is important to make it clear to your solicitor what your intended use of the property is so that it can be pointed out to you what obstacles there are in the title which might prevent this use. During the Missives stage, if not before, your solicitor will have explained to you the tax implications of purchasing property in Scotland and it may well be that you will have decided to take title in the name of an off-shore company or trust set up in order to avoid unnecessary tax problems in the future. Again, HBJ Gateley Wareing can provide detailed advice where necessary.
Deposit
Seeking a deposit is rare in Scotland, but becoming more common with substantial rural properties. A foreign purchaser will almost always be asked to make a deposit of usually 10% of the purchase price, normally into an account which will be administered by both sets of solicitors until the date of entry. For larger properties, a Bank Guarantee or Letter of Comfort will be sought and these should be obtained at the earliest possible opportunity to avoid delays in concluding Missives.
Conclusion of Missives
When every point is agreed (or at least when a mechanism is agreed to resolve any outstanding points), the Missives are concluded and a binding contract then exists between the two parties. As your solicitor is acting as your agent with your authority, you will not have been asked to sign anything at this stage, but you will still be personally liable to comply with the terms of the contract. Your solicitor will have explained to you the penalties involved in delaying settlement without the consent of the seller. In the period between conclusion of Missives and the date of entry, your solicitor will ensure everything is in place for a smooth settlement meeting on the date of entry itself.
Date of Entry
On the agreed date of entry, the keys, titles and searches to the property are handed over to your solicitor in return for the purchase price. Your solicitor will submit the title in your favour and the security documentation (if any) to the Register of Sasines or Land Register in Edinburgh for recording on your behalf. The transaction is then complete.
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