Introduction to buying and selling property in Scotland

Introduction to buying and selling property in Scotland

Buying a house or a flat is usually the most significant financial decision that people make during their lifetime. Buying and selling property can be a complicated process however; McVey and Murricane are pioneers in making a complex property transaction easy to understand.

10 steps to property ownership

There are roughly ten steps to property ownership in Scotland which we have outlined below. It is important to note that the list below is merely a guide and it is not an exhaustive list of the steps required to buy or sell property. McVey and Murricane can offer comprehensive guides for each step below however, for the purposes of this document we have focused on making an offer.

1. Find a propertyEarly Stages
2. Get the Home Report for the propertyEarly Stages
3. Arrange a surveyEarly Stages
4. Arrange a mortgageEarly Stages
5. Make an offerIntermediate Stages
6. The offer is acceptedIntermediate Stages
7. Agree and conclude missivesIntermediate Stages
8. Title ExaminationIntermediate Stages
9. Preparing new Title DocumentationFinal Stages
10. Settlement Final Stages

Step 5: Understanding the process relating to making an offer

Offer Terminology

“Offers Over” 
This option tends to be the one which is used by most sellers. Where a property is listed as “offers over” this means that the price listed for the property is only a guideline and that the seller is seeking a purchase price which is higher than the listed price.

Example: A property is listed for offers over £200,000; this means that the seller is looking for offers over £200,000. Any offer under £200,000 is unlikely to be considered.

“Offers around/in the region of” This option tends to be slightly more flexible than “offers offer” as seller is looking for a figure close to the guideline price but they may also accept offers which are below the guideline price. This option tends to be used when sellers are looking for a quick sale or the home report value of the property was lower than what was expected.

Example: A property is listed for offers around £200,000; this means that the seller is looking for offers around £200,000. It means that offers under £200,000 and over £200,000 may be considered.

“Fixed price” Essentially, the seller has stated the price that they are looking to sell the property for however, it is worth noting that even if a prospective purchaser offers the fixed price there is no legal obligation on the seller to accept this price.

Example: A property is listed for fixed price of £200,000; this means that the seller is looking for £200,000 for the property.

Note of Interest

Once a prospective purchaser has found a property that they like; the prospective purchaser’s solicitor can send a note of interest to the estate agent or solicitor marketing the property. A note of interest is exactly what it states; it is a “note” to the estate agent or solicitor that a prospective purchaser is interested in the property and that they wish to be informed if a closing date for the property is set.

Notes of interest are useful as they not only keep interested parties informed with any updates for the property but they also provide an indication the prospective purchaser is serious enough about the property to discuss the matter with a solicitor about potentially making an offer.

Current practice is that noting interest is done over the telephone and then followed up with an email. The telephone call to the estate agent or solicitor is an opportunity to get a feel for the interest in the property by asking about the number of interested parties and whether there are any other notes of interest.

MMI Important Point: “noting interest” does not guarantee a prospective purchaser the opportunity to make an offer.

Once the seller has an indication of the number of interested parties who would be likely to offer, the seller may choose to set a closing date. It is worth noting that setting a closing date is not a legal requirement. There is no obligation on the seller’s solicitor to set a closing date and the seller is free to accept any offer made up until a closing date is set.

Closing Dates

If the property is going to a closing date, this means there is more than one interested party. A closing date is essentially a date and time set by either the estate agent or solicitor to allow a specified time for offers to be received.

MMI Important Point: The closing date procedure is similar to the “best and final offers” or “sealed bid” procedure in England.

Once the closing date has been set the estate agent or solicitor will notify the interested parties who have noted interest that a closing date has been set and provide the date and time of the closing date.

Offers are then sent to estate agent or solicitor by the prospective purchaser’s solicitor on the closing date. Once all the offers have been received, the estate agent or solicitor will, after speaking to the seller, contact the successful purchaser’s solicitor and verbally accept the offer. The successful offer need not be the highest value offered as there is no legal requirement to accept the highest or indeed any of the offers.

MMI Important Point: The closing date is absolute. If your offer is late then it will not be considered.

Submitting an offer

The offer must be in writing and will consist of:

  1. The price of the property;

  2. What items are to be included with the property i.e. curtains, washing machine etc;

  3. Preferred date of entry; and

  4. Any special conditions such as subject to mortgage financing.

Step 6: Offer accepted

One the offer has been verbally accepted; it will be followed by a written acceptance by the seller’s solicitor called a qualified acceptance. The qualified acceptance will contain specific conditions about the property for example; if your offer states that the price will include the washing machine the seller’s solicitor could respond in the qualified acceptance that the washing machine will not be included. The offer and the qualified acceptance form part of the series of formal letters which make up the missives. These are essentially formal letters between the seller’s solicitor and purchaser’s solicitor until the points raised in the qualified acceptances are agreed.

MMI Important Point: Until missives have been concluded there is no legally binding contract in place and either party can walk away from the sale/purchase.