Personal accounts from Scotland
If you’re looking to buy a house in Scotland, the seller is required to give a home inspection report to anyone who might be interested in purchasing their residence.
The only properties that are exempt from this rule are those that are brand new constructions or buildings that have only recently been transformed into residential properties.
The home report is made up of three different surveys: one general survey, an energy report, and a property questionnaire.
A valuation and an inspection of the current state of the property are both included in the single survey (including the roof, external walls and plumbing). If the structure is older or not built according to typical standards, you should probably think about having a more comprehensive building survey done on the property.
The energy report will evaluate the property’s impact on the environment by calculating the amount of carbon dioxide it emits and provide a rating for its overall energy efficiency.
The property questionnaire will be filled out by the seller, and it will include information such as whether or not the home has ever been flooded or whether or not it has ever been treated for wood rot, in addition to other things like parking arrangements and council tax bands.
Making a bid
The marketing and sale of homes and other properties in Scotland are often handled by solicitors rather than estate agents. They are either listed with a set price or as being open to “offers around” or “offers over” a particular price point.
When a home is put up for sale with the stipulation that “offers around” or “offers over” are welcome, a closing date will be established, and prospective purchasers will be required to submit sealed bids prior to the closing date.
Your legal representative will collaborate with you to draught your offer, after which they will deliver it on your behalf to the seller’s legal representative. Your offer should include not only the amount that you are ready to pay for the property, but also a proposed ‘date of entry,’ which refers to the time when you will pay for the home and receive the keys, as well as any other terms and circumstances that pertain to the acquisition.
When all of the bids have been submitted, the seller will select one of them as the one they wish to accept.
At this point, no cash is exchanged unless the home being purchased is brand new; in that instance, the buyer may be required to put down a deposit.
For purchasers in Scotland, conveyancing services.
You will be required to hire a solicitor very early on in the process of purchasing a home in Scotland. This is a mandatory step. Your real estate attorney should do the following once you’ve viewed a home that you’re interested in purchasing:
explain the home report to you, verify that any improvements have been performed with the appropriate planning authority and building control approval, assist you in putting up your offer, and then forward your offer to the seller’s solicitor.
When all of the bids have been submitted, the seller will select one of them as the one they wish to accept.
This does not have to be the highest priority; for example, they may decide to give priority to a buyer who does not require a chain.
In the event that your bid is accepted, your lawyer will verify the terms of your mortgage with the lending institution, negotiate a date for entry, and handle any legal inquiries regarding the property.
Bringing the communication to a close
In addition to this, they will negotiate the contract with the solicitor representing the seller. This practise is referred to as “concluding the missives,” and it results in a legally enforceable agreement for both the buyer and the seller. In contrast to England and Wales, your solicitor is permitted to sign contracts on your behalf in the United States.
At this stage, the conveyancing process, which is used to transfer ownership of the property, will be started by the solicitor. This will involve your attorney or legal representative:
checking the property’s title and deeds; checking the property’s legal ownership; making sure the seller is not insolvent and therefore ineligible to sell the property; checking the property’s legal ownership;
providing you with information regarding any “title burdens,” which are obligations that you, as the new owner, are obligated to fulfil;
ensuring that any improvements done on the property has the appropriate licences, checking that any planned local developments could have an effect on the property, and paying the money to your seller’s solicitor on the date of entry are all important things to do (the day you get the keys).
When the time comes for you to enter the house as specified in the contract, you will hand over the total purchase amount to the seller in exchange for the keys to the home. This position is referred to as the “settlement” point.
Your attorney will be responsible for paying any Land and Building Transaction Tax (LBTT) that is owed, registering the change of ownership with the Registers of Scotland, and lodging title deeds with your mortgage lender (you will also receive a copy of these documents).
LBTT, which stands for Land and Buildings Transaction Tax, is the Scottish equivalent of stamp duty and is levied on the following things:
Properties priced at or above $175,000 are ideal for first-time buyers.
Properties costing more than 145,000 dollars to non-first-time purchasers who are acquiring a property for themselves to live in.
Buyers interested in second homes or properties costing more than $40,000
Use our LBTT calculator to determine how much tax you’ll owe and get information on the applicable rates.
Costs of conveyancing
The following table provides you with an estimate of the costs associated with this conveyancing procedure that you should plan on incurring:
A building or part of a building that contains two or more apartments that are split horizontally and designed to have separate ownership is referred to as a tenement. This can be the entire building or just part of it.
This comprises houses that have been transformed into apartments, high-rise apartment buildings, and both traditional and contemporary structures. Although most tenements are residential, there are some that also function as office buildings.
How do tenement properties work?
Tenement housing makes up more than a quarter of the total housing stock in Scotland.
When you purchase a flat in a tenement building, in addition to the flat itself, you will also own a portion of the tenement’s common areas as well as a portion of the land on which the tenement is built.
It is important that the title deeds to each apartment clearly state who owns what. If this is not stated in the deeds, then certain rules will be enforced. For instance, the owner of the flat on the top level will be granted ownership of the roof space above their unit.
Have a discussion about it with your attorney to find out how the process works for the home you intend to purchase. It is essential that you have a complete understanding of the configuration.
Tenement maintenance expenses
If you own a flat in a tenement, you are responsible for paying a portion of the costs associated with maintaining the building’s common areas.
It is necessary for the majority of the owners of the flats to agree on whether or not the repairs are necessary, which might lead to complications and delays if it is not an absolute necessity.
What exactly is a “factor”?
There are some instances in which the titles call for the appointment of a ‘factor.’
This might be an individual or a company that is in charge of overseeing and giving instructions regarding repairs. In the event that this is not specified in the titles, the owners of the tenement may come to an agreement to appoint one.
Assuming that the factor behaves appropriately, the owners of each apartment will be responsible for paying the costs associated with any necessary repairs.
The majority of property titles in Scotland have conditions that place limitations on how the land can be used. One of the conditions that will typically be imposed on a property is that it cannot be utilised in any way that would result in financial gain.
These conditions are also transferred to the new owner of the property when that occurs. Typically, prior to the date of entry but after the contract has been finalised, your solicitor will tell you of all title conditions related with the property you are purchasing.
If you are unsatisfied with any of the conditions attached to the title, you have the option of asking the seller to work toward changing the conditions. However, this occurs only very infrequently, and the title conditions are typically need to be approved before the purchase can move forward.
Properties held in feu, as well as feu duty
In November of 2004, this complicated method was done away with for the majority of properties, but you should still verify with your solicitor to be sure that it does not apply to your property.
Purchasing a home with another person: choosing between joint ownership and common property
If you and another person wish to buy a house together, you have two choices: either you can own it jointly or you can make it common property. Before making a choice, it is important to consult with your attorney about the options that will be most suitable for your circumstances.
If you and another person have purchased a home together in joint ownership and one of you passes away, the other person will be entitled to your half of the ownership of the home without having to pay any further conveyancing fees.
It is possible for joint owners to sell or otherwise dispose of their part throughout their lifetimes, but they cannot leave it to another person in their will.
Property held in common
The owners of a residence that is owned as “common property” have the ability to sell or donate their part of the home throughout their lifetimes or through their wills.
This may become a problem, for instance, if a couple that had purchased the property together later decided to go their separate ways. Before you elect to apply any of these clauses, your attorney ought to walk you through the repercussions of each and every one of them.
Assistance to Purchasers (Scotland)
People are able to take advantage of this programme offered by the government in order to purchase newly constructed homes with as little as a 5% down payment, a 15% equity loan from the government, and an 80% mortgage.
In Scotland, the Help to Buy programme is scheduled to continue operating until March 2021 at this time.
The ways in which the Scottish real estate market is distinct from those of the rest of the UK
In general, the procedure of purchasing real estate in Scotland is both more expedient and less likely to be derailed than it is in the rest of the United Kingdom, with the exception of Northern Ireland.
In point of fact, research conducted by TwentyCi in 2018 indicated that after an offer had been accepted, 10.4 percent of transactions failed to go through in Scotland, which was lower than the percentages for England (21.8 percent), Wales (22.9 percent), and Northern Ireland (9.6 percent).
This is due to a multitude of factors, including the following:
Because the preparation of a house report requires financial investment, it is more probable that the seller is serious about selling the property.
Because purchasers are better educated about the condition of a house and its value at the time that they make an offer on it thanks to the home report, there is less of a chance that they will back out of the deal later on.
Gazumping, which occurs when another bidder makes a greater offer after yours has been accepted, does not happen very often because homes are often removed from the market once a price has been agreed upon. It is against the law for a solicitor to continue to represent a seller after they have made the decision to sell to a different buyer. As a result, solicitors do not recommend engaging in this business practise.
The purchase of a home in Scotland will take between four and eight weeks on average, whereas the same transaction in England, Northern Ireland, or Wales is more likely to take between eight and 12 weeks.