While Scotland is part of the UK, when it comes to the process of buying and selling property in Scotland, there are some significant differences compared to the rest of the country.
It has its own laws and legal system, which both sellers and purchasers in Scotland should be aware of.
This article examines those differences, and the impact they can have when it comes to purchasing a new home.
Do you need a Home Report to sell a Scottish property?
Since 1 December 2008, most domestic properties marketed for sale in Scotland are required to have a Home Report.
It was introduced to provide better information about the condition of properties to purchasers before they make an offer; to incentivise sellers to carry out repairs prior to marketing the property; to remove the need for multiple surveys and valuations being carried out; and to prevent the problem of artificially low asking prices being set.
However, not every property requires a Home Report. There some exceptions to this rule, which include:
- Private sales where the property isn’t being advertised on the open market
- Where the property has been on the market continuously since before 1 December 2008
- New homes that are bought off plan or have never been occupied before
- Properties that have been converted into homes but have not yet been occupied as a home
- Right-to-buy homes
- Properties that are used for both residential and non-residential purposes
- Holiday homes that can only be used at certain times of the year. This doesn’t include properties that can be used at any time of the year, but are only used sporadically
Although it is possible to delegate the arrangement of a Home Report to the agent marketing the property, it is the seller’s responsibility to ensure that it is carried out, and to pay for the report to be completed.
A home may be taken off the market for up to four weeks without a new Home Report being required. However, should the home be on the market for more than three months, it may be necessary to have another report commissioned, as sellers may be unwilling to rely on a report older than twelve weeks.
Personally, I really like the idea of having a home report available when buying property. Too many times I’ve looked at a property in England and loved it, only to be put off when I get the survey back.
In these situations, a home report would have been invaluable to me and it’s one of the things I most like about the process of buying and selling property in Scotland.
What’s included in a Home Report?
A Home Report is comprised of three parts: a survey of the property, an energy report, and a property questionnaire.
The survey must be performed by a qualified surveyor and is a visual inspection of the property that includes its condition, its accessibility and any repairs that may be needed.
It is then up to the seller if they want to make those repairs themselves or leave it to the purchaser. It will also include a valuation and an estimated reinstatement (rebuilding) cost for insurance purposes.
Since 9 January 2013, the Energy Performance Certificate (EPC) findings in the process of buying and selling property in Scotland must be included in any advertising of the property.
It must also include the details of any Green Deal plan, as the purchaser will become responsible for any repayments. The EPC must be supplied to a potential purchaser even where no Home Report is required.
The final part of the report, the property questionnaire, is made up of sixteen categories, which include:
- The council tax banding
- Issues that have affected the property, such as fire or water damage or asbestos
- Alterations and extensions
- Details of any specialist work or guarantees
- Details of any notices that could affect the home
Together, these three sections provide potential purchasers with considerable information about a property prior to any offer being made, helping them to make an informed decision about whether they wish to offer.
When is the Home Report supplied?
The Home Report in the process of buying and selling property in Scotland must be provided within nine days of requesting it, and a reasonable charge may be levied for providing a copy.
If the report is not supplied within the nine days, the local council’s trading standards department can impose a fine of £500.
However, there are some exceptions to this as well.
These are if the seller doesn’t believe that the person requesting the report is a serious potential purchaser; that they don’t believe that the purchaser can afford the property; or that they would prefer not to sell the property to the potential purchaser, as long as this is not for illegal discriminatory reasons.
The difference between buying a house in Scotland and England
In both England and Scotland a price is set by the seller, in conjunction with their estate agent. However, in England, the price set tends to be the maximum that the seller can expect to achieve. In Scotland the price is either fixed or is the minimum price that the seller will accept.
In England, offers are made verbally directly to the estate agent, and are usually below the asking price, as purchasers seek to get the best deal.
A period of negotiation usually follows as both parties seek to reach a price that both are happy with. Where several offers are received, the estate agent will give each buyer the opportunity to increase their bid.
We have been in this position ourselves when selling our first property. We had multiple offers around the asking price so we asked all interested parties to make their best and final offer to secure the property.
The process of buying and selling property in Scotland sees a minimum price being set and, where there is more than one potential purchaser, most properties are sold through a ‘blind bidding’ process.
Offers are made via
If no closing date is set, then it may be that no-one else has registered an interest and, in those cases, it may be possible to negotiate a price with the seller.
Any offer in Scotland is sent as a letter from the solicitor, and should include several prices of information at the time of the offer. These include:
- A brief description of the home of interest
- The date that the purchaser wants to take possession of the property
- The offer price
- Any items that they wish to buy from the seller
- Any other conditions that are important to the purchaser
Overall, it feels like the Scottish process just cuts out a lot of the uncertainty we have experienced in the English system. It may still not be perfect but most people who have bought in both countries prefer the Scottish system.
Is an offer on a house legally binding in Scotland?
If the seller accepts the offer sent by the purchaser’s solicitor, their solicitor sends a letter known as ‘qualified acceptance’, which means that the offer is accepted dependent on certain conditions being met.
These conditions are negotiated between the two parties’ solicitors using letters known as missives. Until the conditions are agreed, the offer isn’t legally binding and may be withdrawn.
However, compare this process of buying and selling property in Scotland to the system in England and Wales where the offer isn’t legally binding until contracts are exchanged – which doesn’t usually happen until the very end of the process.
We know from personal experience, not being legally bound until the very last minute causes a lot of stress and anxiety for both buyer and seller. We certainly think the earlier an offer is binding, the better for all concerned.
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Can you withdraw an offer on a property in Scotland once it’s accepted?
The process of buying and selling property in Scotland means that once agreement has been reached through the missives, it is considered to be a binding contract. Ant attempt to break the contract after this point will result in a liability of thousands of pounds in damages to the seller.
It is worth noting that the property becomes the purchaser’s responsibility from the day that the missives are accepted, not the date that they move in, and the purchaser must have insurance from that date.
This is different from England, where the buyer is responsible for the property only from the moving in date.
This might save you a bit of cash as the buyer, but it leaves you open to damage occurring to the property between your last viewing and the move-in day. While there are some legal protections against this, they can be hard to enforce.
The process of buying and selling property in Scotland – how long does it take?
As in England, the process of buying and selling property in Scotland sees the acceptance of an offer is followed by conveyancing. This is the process of transferring the title of a property from the seller to the purchaser, and involves the solicitor carrying out a number of checks.
These checks include ensuring that the seller actually owns the property, and that the property deeds are defect-free and don’t contain any unusual conditions that could affect usage of the property.
In addition, the solicitor will check for any restrictions or obligations that affect the home, for example if you are unable to fence the property, and that any mortgages or debts secured on the property are paid off when the transfer happens.
As in England, there is, sadly, no set timescale for completing a purchase. In the case of a straightforward residential transaction, the purchasing process can be as short as six to eight weeks. In more complex cases, it can take much longer.
Summary
As can be seen, there are significant differences in the process of buying and selling property in Scotland compared to the rest of the UK, which purchasers need to be aware of.
In particular, they should note that once an offer has been accepted, they are legally obligated to purchase the property or face considerable financial penalties.
Another important difference is that the purchaser becomes responsible for insuring the property from the day that the offer is accepted, and not the day that they take possession of the home.
We have bought properties under the English system and when we compare the two, we definitely prefer the Scottish system as both the buyer and seller. It may still have its downsides, but overall, there’s much more transparency and certainty with the process of buying and selling property in Scotland.
