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Below is the advice given by The Law Society of Scotland. Solicitors can ease the strain and help to avoid the pitfalls of the complete house-buying process, from noting interest in a property to concluding the deal. Their local knowledge can also be useful in helping you find a property.For a more detailed description of the process, please download our Buying a property information sheet.
A solicitor can ‘note interest’ in a property you like. This shows you are interested in the property and want to be kept informed of developments, such as the fixing of a closing date for offers.
Sellers must provide a home report for buyers. These include a single survey (which gives the condition and value of the property), an energy report (which contains a house’s energy efficiency rating and carbon dioxide emissions) and a property questionnaire (which includes general information such as a property’s council tax band, factoring arrangements, the existence of any local authority notices and information about alterations that have been made).A surveyor instructed by the seller will provide the survey contained in the home report pack. In many cases this will be sufficient for an interested party to submit an offer. However the potential buyer may have to commission another survey at the request of a mortgage provider or if the original survey was carried out some time ago. Your solicitor can provide further details and advice.
Firstly – We are here to help, we move thousands of buyers and sellers each year. Don’t worry, it might seem complex and daunting but remember you don’t do all the work. We will take you through the whole process, step by step.
The start – It’s best to have a quick informal chat. If you are organised great, if not we can set out the points to get you started. We will clear up ANY questions you have at this stage: getting a mortgage; understanding surveys; and how to offer for a property. You ask, we answer.
Don’t get overly concerned about getting the timing right or worried about what comes first! Your not necessary to be an expert, 99% of the work is done for you. It’s not for you to check surveys, order your funds, negotiate contracts and money. We’ve got the technical side ‘nailed’.
Assumptions create 70% of all conveyancing stress and issues. We make assumptions every minute of every day. Something happens and we instantly assign meaning to it. That is an assumption. Yet conveyancing and the residential legal system in Scotland is constantly changing and so does what your solicitor is reqired by law to do and what is required of you. We start imagining and reasoning what is going on, we look at social media and ask friends, what they think, what they experienced. We rationalise an entire assumed story based on assumptions and we believe it. One assumption leads to another assumption; we jump to conclusions and we take it personally. Almost all conflicts and desisions we take are based on assumptions. Assumptions are nothing more than false stories that we are telling ourselves. They create a big drama for no reason because they aren’t based on fact. If you really want to avoid the stress of moving, ensure that your experience is a possitive one and you are informed, why not just ask your property solicitor?
NEVER DISCLOSE YOUR BUDGET.
Best only used when negotiations have collapsed, a last all or nothing try. They’re either really not interested in your price or they are trying to secure a better price either way it’s your last chance. But remember to only pay what you want.
THE BEST YOU CAN GO TO?
This is an aggressive phrase that turn the tables and force a justification. Only use this if you can stay the course and keep up the pressure. The trick to using this phrase is silence. After saying this particular phrase take a moment in complete silence. Maintain this silence for as long as you can. People are uncomfortable with prolonged awkward pauses and will speak just to fill the gap in conversation.
YOUR HOUSE IS UNIQUE.
Never point out that there are no other similar houses you are looking at. Rather, point out that this is one of many. It’s crucial that you have up to date information, so just make sure to do your research.
DON'T HESITATE
Don't be reluctant to try and strike a deal when viewing if you can. If you don't our experience shows that someone will, but if you try you need to go big! If not they may not be tempted to call off all the other set up viewings.
DON'T BE OVER KEEN
We all know this? Most people have an insatiable need to be liked, be friendly, just remember in that moment when you want to make an impression, gain rapport and hopefully influence the deal by being likeable and don't over compliment. You will drive the price up!
CAN MEET IN THE MIDDLE?
How far can you come down/up in price to meet me? Sometimes it’s difficult to work out how much clear blue water there is between you both. Or for that matter how much leeway you may have if you can force the other party to engage on there price. In such a scenario you should use this phrase.
IF IN DOUBT LET US HELP
Our expert property lawyers negotiate millions of pounds worth of property deals for our client's each year. It's part of our service.
Paid to be friendly and helpful but you must consider who they really work for, you or the seller? Paid by commission on the value you offer, the higher the offer the more they make. What makes the price increase? Pitching one buyer off against another; setting closing dates; the use of enthusiastic buyers vs some buyers who may not even put an offer in. One fact is true the more you openly love the property, the more you let the estate agent know what your budget is and the more you will therefore pay. Always remember that thousands of pounds will be saved or overpaid dependent on the nature of your relationship with the sellers estate agent. That’s right, its the sellers agent NOT yours. Also remember that they do this on a daily basis you don’t. We always advise that you avoid doing the negotiations yourself but leave this to your representatives, your lawyers. They will no doubt do this on a daily basis. The fact remains that the use of an EXPERT property lawyer at this stage can save you thousands of pounds and in a way pay for your legal costs.
Appointing a solicitor is never easy as you have a huge variety to choose from. What should I look for? This is where we may seem controversial, yet ask yourself what do I need a lawyer for, what is the real purpose? Your lawyer is there to do more that give you cheap fee. They are there to ensure that when you spend epic money you are protected and your investment is ‘as safe as houses’. Like any other good professional, some are more focused in a particular area. Some are keener to ask the difficult questions, some will negotiate with a sharper focus from day one. Again remember saving a few thousand pounds at negotiation stage far outstrips any legal fee. Asking the right questions in this buyer beware process can save you thousands of pounds when you come to sell. Our advice is spend less time questioning the fee and consider asking questions about the service, the help and the proven track record. Who will look after your investment best? More is at stake than a saving of a few pounds.
Like most contracts you enter there are caveats. Sometimes its not very clear who the surveyor is really working for, consider the commercial loyalties. Were they appointed by you? Were they appointed by your bank, the seller, Estate Agent (who acts for the seller) or your financial adviser. Did you pay them direct or through another (added to your financial product). Independent professional advice is a must when buying. Always remember that there are huge commercial pressures at play here and it wouldn’t be the first time things are missed. To keep you straight you must always deal direct with the surveyor or for that matter any other party. When checking the property do more than a cursory glance, look for signs of damp, water damage, cracks, ask about alterations and then challenge your surveyor about his findings, look beyond the paper report. Call the surveyor!
We all have heard the stories about how hard it is to get funding to buy a property. In this regard we always advise clients to stay on top of the lending process NEVER assume that things are in progress. The banks will obtain reports , deeds, documents, ask your lawyer to report on matters and they may even appoint their own surveyor or lawyers. So always take it that until you have your loan paper in your or your lawyers hands that is not agreed. To aid the progress return all the documents and deeds as fast a possible and ALWAYS call to ensure that they have them. Again never assume that things are in hand. Its now about outsourced mail rooms, changing teams, 48hr scanning and call centers. Long gone are the days of dealing with your local branch. In may cases your own branch or financial adviser has not power to give you accurate advice once the process starts. Unfortunately computers were meant to streamline services but in this case they may not have. Our advice is keep pushing and checking (in a friendly way) , never assume that things are progressing and keep your lawyer up to date about the progress.
Its unavoidable, you will come across other people trying to buy the same house as you and for that matter other people trying to get as much for their property. Always remember to keep your ‘cards close’. Remember that your lawyers can always do the hard negotiations to help diffuse any awkward face to face conflicts. Its easy to avoid the pointed questions by having to ‘think about things’. Its nice to be helpful but always remember that everyone has their own motives and your success at getting your ideal property for a good price tends not to be one others will promote. Contact your lawyers before even going to view your first property or talking to an estate agent. Unfortunately many people will have a chat with an estate agent to start with, worse still they may even use the Lawyer that the estate agent points them towards! A good lawyer is your best ally, your lawyer should always be independent from others and you should always have a chat with them BEFORE YOU START.
PURCHASE OUTLINE
Client Gets in Touch
Phone estate agents. Note interest, ask whether closing date (unless there is a fixed price), ask for schedule of sale particulars.
Ask for a copy of the Home Report and discuss with client.
Talk to client about survey and arrangements for financing the purchase. If client wishes, instruct survey. Check lender will accept surveyor in Home Report.
Take instructions for the offer, taking into account home report. If offer is to be subject to purchaser’s own survey, warn client it may be less attractive.
Send client Terms of Engagement letter, fee quote, consider ADS implications and ask for money laundering ID. Where company, check Companies House website to make sure it exists. Offer Goes Out
Send offer to estate agents.
Hear from estate agents whether offer has been accepted and inform client.
Await qualified acceptance. Qualified Acceptance and Titles Come In
Receive qualified acceptance (and usually also title deeds and seller’s drafts: Legal Report, Application for Advance Notice (Disposition), Discharge of Standard Security and Letter of Undertaking but note variation in purchase transaction in project where seller’s solicitor does not have titles) from seller’s solicitors and take instructions from client.
Reply to Qualified Acceptance
Send formal letter in reply. Revise Seller’s Drafts, Examine Title and Draft Disposition
Revise seller’s solicitors’ draft Legal Report, draft Application for Advance Notice (Disposition), draft Discharge and draft Letter of Undertaking.
Examine and note title. Raise observations on title.
Draft Disposition (taking instructions on how title is to be taken and which kind of destination (survivorship, etc. the client wants). Send these to seller’s solicitors.
Mortgage Instructions Come In
Receive mortgage instructions.
Draft Standard Security and (if appropriate) Matrimonial Homes and Civil Partnership Declaration.
Explain conditions in offer of loan, mortgage conditions, and meaning and effect of Standard Security and Declaration to client, preferably in writing.
Have Standard Security and Declaration (if appropriate) signed.
Complete lenders’ Certificate of Title and Request for Loan Funds and send (by fax as well as post) to lenders.
Put testing clause on Standard Security, and draft Application for Registration form for the Standard Security. Keep Standard Security (and Declaration) and Application for Registration form on file to await settlement. Draft LBTT Form
Draft LBTT Return, explain it to client and have it (and also, if applicable, the letter of authority for online submission of the return) signed by client. Keep signed form (and letter of authority) on file to await settlement. Property Enquiry Certificate and Other Reports and Factors’ Letter Come In
Receive property enquiry certificate, coal mining report (if appropriate) and EnviroSearch (if appropriate). Check no adverse entries.
Receive factors’ letter and common insurance policy details. Check survey report to see that level of common insurance is adequate and advise client of policy details and any significant comments about policy by letter.
Send Application for Advance Notice (Standard Security) to the Keeper Missives are Finalised and Concluded
Receive formal letter from seller’s solicitors concluding missives or continue to exchange formal letters, taking instructions from client in relation to each, until missives are concluded.
When missives are concluded, advise client there is now a binding contract.
Engrossed Disposition Goes Out
Send engrossed Disposition with draft to seller’s solicitors. Ask Client for Balance of Price, LBTT, Registration Dues and Fee for Advance Notice (Standard security) and Fee
Ask client for any balance of price, Land and Buildings Transaction Tax, registration dues, fee for Advance Notice (standard security) and fee. Ensure you receive these in time for funds to have cleared before settlement.
Lodge Application for Advance Notice (standard security) with Keeper.
Receive Advance Notice from Keeper (Standard Security)
Searches Come In
Receive Legal Report and (if appropriate) Search of the Register of Community Interests in Land from seller’s solicitors. Check no adverse entries. Check Legal Report discloses the Advance Notices. (Disposition and Standard Security) Answer Remaining Observations on Title
Check all observations on title answered prior to settlement. Settle
Send cheque with settlement letter (or arrange for bank transfer and send settlement letter) to seller’s solicitors.
Phone Seller’s solicitors and settle. Advise client that keys now available and remind of time limit for complaints about central heating, etc.
Send LBTT form online to Revenue Scotland with cheque or bank transfer for Land and Buildings Transaction Tax
Receive signed Disposition, Declaration (if appropriate), title deeds, signed Discharge with Application for Registration form and registration dues (or if appropriate, letter of undertaking), any consents and permissions. If dual registration, also receive seller’s solicitors’ Application for Registration form and registration dues.
Put testing clause on Disposition.
Advise Council Tax Office of the change of ownership (only applies in some parts of Scotland).
Receive computer generated acknowledgement of receipt of LBTT Return from Revenue Scotland. Print and file LBTT acknowledgement.
Send Disposition, Application for Registration form, cheque or bank transfer for registration dues, any Declaration and Standard Security with Application for Registration form and cheque in favour of Revenue Scotland for LBTT to the Keeper. Also, where dual registration, extra Application for Registration form and cheque or bank transfer for registration dues
Send client receipted fee note and cash statement.
Receive email acknowledgment from Keeper regarding application for registration
Receive email Title sheet from Keeper
Receive return of Disposition and Standard Security and any Declaration from Keeper.
Send title deeds, any Declaration relating to Standard Security and any consents and permissions to lenders.
Advise client title deeds may be held by lenders as condition of mortgage until loan is repaid.
Write “implemented” on seller’s solicitors’ letter of undertaking and return it to them.
Like most things in life you can try and understand the whole process yourself or you can rely on help from others. In truth we tend to do a bit of both, but the real issues are won or lost on the accuracy of the information that we rely on. The main services that you will have to deal with are as follows;
It may seem obvious, but there is a lot to consider: the area you want to buy in; the space you’ll need to live in; the price of property that you can afford; the condition of properties you are happy with – the list goes on.
So, where to start? Many people look at online estate agency portals these days. The days of print are diminishing and there are many free to use online brands who offer a wide variety of property options when it comes to buying property. You can refine your search parameters to only include properties that might be of interest to you. You can also sign up to mailing lists where you will receive emails about properties that are new to the market that suit your needs
Want to save money on your conveyancing and have excellent service? We provide instant estimates and practical advice from Scottish conveyancing solicitors. Our nominated lawyers are ready to move quickly on your house sale, purchase or remortgage. All legal work and Solicitors used and or work referred are Regulated and Authorised by the Law Society of Scotland in accordance with the Solicitors’ Code of Conduct and Scottish laws. You can be safe in the knowledge that all Scottish Lawyers hold professional indemnity cover and can provide excellent practical help. For further information on the help that is on hand just give us a quick call.
The magic question. The value of any property is what someone will pay for it. That may sound fluffy, so here are some suggestions as to help you figure out what it’s worth to you. Make sure you obtain a copy of the Home Report for any property you like the look of. This will be available through the marketing estate agent. The Home Report will give you a ballpark valuation and indication of what the property is worth taking account of location, size and condition. View the property. Always do this as it will help you make up your own mind as to how you feel about it. You may only live in the property for a short while or maybe for the rest of your life, but the value is at least partly pegged to your own expectations. Consider whether the property is in a locale that would enable you to sell at least at market price, should you wish to at some point in the future. Be level headed. Just because you think you love it, it doesn’t mean everyone else will. You’re spending a lot of money so you’ll at least want to know that you’ll get it back if you sell.
The type of offer you make for a property will often depend on the way it is marketed. The most common methods are ‘offers over’, ‘fixed price’ and ‘offers around’. By knowing what the seller hopes to achieve, you can better fine tune your offer strategy. ‘Offers over’ usually is the first pitch at a newly listed property and indicates that the seller and their agent are confident of an offer in excess of the price. Whether they achieve this or not is another matter. The remaining two tend to reflect a more agreeable and negotiable position. They are often where the seller is looking for a quick sale or has been struggling to generate enough interest.
Mortgage lending is a competitive business. There are many deals out there and you should shop around. You can either go directly to the lenders or go through an intermediary called a mortgage broker. The advantage of an mortgage broker is that they should be able to offer you an enhanced choice of lenders. Beware of excessive fees. If using a mortgage broker, make sure that they are fully regulated by the Financial Conduct Authority (FCA) and ask what they charge for their service. Some mortgage brokers will not charge a fee for their services as they will receive payment from the mortgage lender for selling the product. Also be aware that often mortgage brokers may have associations with legal firms and may recommend their services. This is rarely a free of charge service and may result in you paying higher costs than if you went direct.
You may end up offering for more than one property, especially where there is a lot of interest in the properties you like. Don’t become disillusioned! You’ll need a solicitor to make a formal offer for you and if you need to do this more than once, you don’t want to end up with large legal bills before you’ve even had a successful offer accepted. At HBC Conveyancing, we’ll make sure that each offer is free of charge until we help you offer for, and eventually buy your chosen home. It’s very important to make sure that your mortgage lending is in place as it can take some time for your lender to complete the required documentation and issue your offer of loan. Delay equals expense – so be organised.
1. Is The Lawyer Recomended By The Builder always Got Your Back?
2. If they negotiate hard for you, will the builder recommend them again?
Clients considering buying a New Build property are often directed to use a lawyer chosen by the Builder/Seller. The law allows you to instruct a lawyer of your own choosing, not just one recommended to you by the builder/seller. We are sure that they will provide you with the approved legal advice required, yet seeking your own lawyer, independent from the builder/seller has its own benefits. Buying a new build property has its own set of legal rules. It can never hurt to seek a few legal opinions before you sign or bind yourself to any contract. Agreeing to buy a new build or signing up to a builders part exchange contract is no different.
In short, seek some advice, it only takes a few minutes to discuss and at the end of our chat if you decide to go with the builders chosen lawyer, we wish you all the best.
Although part exchange can be viewed as a process in its own right, it is basically a sale and purchase in the same contract. To this end many people can get confused.
The contract in a new build property are normally issued by the builders lawyers. They will detail the usual clauses covering what is being sold for how much and what is the remedy if the contract is breached. The date of entry will often be the date on which the property is passed as fit for habitation by the local authority. As the timing of construction is not perfect science (it can be delayed by weather, materials, construction workers etc.), the date of entry is not fixed and liable to fluctuation. You should factor these issues into your plans, especially if you are also selling your own home.
The search costs required, are dependent on the terms set down by the builder. In many cases the builders do not pay for any searches. (A fact detailed in our Guide to Conveyancing) If timed correctly, you can cut back on the costs by combining some of the searches to cover both, but you will still have to purchase the basic searches.
One of the issues your own lawyer must consider is to ensure that your builder is also bound into the transaction. Although this seems self evident, you must remember that the formal offer produced by your builder can in some cases highlight the best position for them – not you. So before you sign anything ensure that you have discussed it with your lawyer. Ensure that your own interests are covered.
The main issue for many clients is getting the statement of account as early as possible. Given the amount of incentives, builders costs and factor charges it takes time for the builder to issue a statement of account for the transaction. As such your own lawyer may not be in a position to advise you of the final bill until the builder issues their own statement which should include any additions to the specification of the property, that you have requested.
RULES THAT BIND US ALL
If you use a lender or bank to help buy your property brings its own unique set of rules that you must be aware of. The first thing you must be aware of is that your appointed lawyers most probably also act for your bank. Is this an issue? Well it can in many cases complicate matters, for instance
Your bank or lender will ask your lawyer to confirm many areas. Despite the fact that your bank or lender has stated that they will provide funding, they ask your lawyer to ensure other details before sending the funds. For example, but not exclusive….
1. If your financial situation changes
2. If the purchase price changes
3. If any party to the purchase changes.
4. If you are receiving any of your deposit from another person.
5. If you have deviated from any of your agreements or circumstances that you discussed with your bank.
6. If ALL the paperwork for the property is in place (no exceptions).
7. If ALL the searches have been completed and are all ok.
8. Your identity has been confirmed.
9. And finally and possibility that all the conditions of the loan including all the conditions of the Council of Mortgage Lenders Handbook(CML) have been adhered to.
If your lender has or instructs itt's own lawyers be aware that this will case the transaction to take longer (as there are now 3 law firms to all agree). Finally the cost will no doubt go up as the lenders lawyer normally will require you to pay their bill and as is normal more work will be required.
Questions you should know the answer to:
– Do I need to fix the defects in the Home Report?
– Do I need to disclose any defects and problems to the seller?
– What is the benefit of appointing a solicitor before getting an offer?
– What should I not discuss with any potential buyer?
A survey is required to provide value and comment on the structure.
You should always have a good read at the survey report and discuss its contents before your surveyor publishes it. This defines the ball park value of the property and comes as part of the Home Report. Among other things, you should check the value the surveyor has placed on the property and any recommendations for repairs that are required. You may also wish to see if the surveyor has made any comment as to whether or not the property has been altered or extended as this could affect the value and structure. The survey also contains other information such as the age of the property and comment regarding the area and surroundings, as well as suitability for mortgage lending.
Prepare your property before you place it on the market or receive an offer - Being legally prepared before you receive an offer could be the difference between selling or not. We always advise you that everything is in place for your property before you receive your offer to buy. Your legal team should organise your titles, alteration documents, permissions, insurances etc. early. Sometimes (due to defects found in your title deeds or lenders) this can take several weeks. Within 48hrs of any offer you should have your acceptance of the offer along with your titles back to the purchasing solicitor. Your appointed solicitor is best placed to ensure that your property is legally in the bast place to maximise your value before putting it on the market or even approaching an estate agent.
Written or verbal offers? Offers made in Scotland that are to be binding need to be in writing. Verbal offers can be made, although this would usually be an informal agreement made between a seller and a prospective purchaser. Occasionally, a verbal intimation of a price may be used where the offer is speculative. For an offer to proceed to the stages of contract, it must however be in writing.
So you have a written Offer. Warning – At this stage remember that you do not have a binding contract (missives are not concluded). As such the purchaser can withdraw and decide to buy another property (withdraw the offer). Although not ethical it does happen, so be sure to tell your Estate Agent to keep marketing your property until missives are concluded. You must protect yourself. Also if you take your property off the market and then have to re-market your property again the law requires you to purchase a new Home Report! If you do go ahead and start booking removals and making plans please remember that no one has been bound by contract to purchase, you are not bound to sell the property either.
What will the purchasers Lawyer Look for? Purchasing a property in Scotland is very much a case of ‘Buyer Beware’. There are normally limited warranties provided by Sellers after the date of entry and as such the purchasing solicitor must know what to check, examine and look for. It is not for you or your lawyer to disclose problems (unless actively asked). Ensure that you point all questions to your lawyer who in the best place to word any answer. To this end the purchasers lawyers asks and the sellers lawyers must provide the answers, searches and more often than not the persuasive facts to keep the deal moving and get agreement on the missives. Sasine vs Land Register of Scotland - Scotland is in a transition between 2 property registers. As such the purchasing Solicitors require to fix all and every minor property discrepancy before they can register the purchaser as the new owner. Due to the fact that the majority of ownership titles are based on deeds that can be a far back as the 1800’s, it is now surprise that the purchasing solicitors have many requests and questions. Ensure that your appointed lawyer is a property expert. It is our belief that this is not the time to appoint a multi disciplinary lawyer.
Agreeing the Missives. For the seller there are more pitfalls to avoid and ensure that any warranties/guarantees that you provide are satisfied before the date of entry (the day of the sale). The missives tend to seek assurances from the seller. Many Scottish lawyers tend to use the ‘Standard Clauses’ which in general can be be more onerous on the seller. A list of the actual Standard Classes can be found by contacting us.
The Titles in brief- The titles to any property are similar to the log book for your car. Unfortunately they are a bit more complex an can throw up grey areas, especially if the deeds were drafted ambiguously. Which happens more than you may think and more than we like. The Titles Contain - Who owns the property, what debt is secured over the property, the boundaries, the burdens (rules of ownership) and a list of any other rights or people/companies who have an interest in the property (e.g. a public right of way, a shared access or shared septic tank). They will also go into detail in areas such as the owners rights to access the property, draw water, use services such as pipes, electricity and managing maintenance in the case of flats. All of these areas may raise questions by the purchasing solicitor. Tiles can easily date back to before the 1800’s and are in some cases incomplete. If you have further questions you can call and ask us as this is a very complex area.
Time to move. Once you have concluded missives you are contracted to sell and move out. Remember that you must not remove any items built in to the fabric of the property unless specified in the missives. You must not damage or leave the property full of rubbish. Also note that your lawyer cannot obtain the funds for the sale untill you have cleared the property and he/she can release the keys. So the sooner that you can remove all your property and have the house cleared the sooner your lawyer can have the property sold. In Scotland, settlement tends to be done by ‘Solicitors Cheque’ a guaranteed payment method. These funds will require to clear in your lawyers client account before he/she can CHAP’s or BACs the funds to you. Ensure that you keep your phone charged and your lawyer knows this number as your land line has no doubt been switched off. If you are Buying on the back of the Sale – If you are buying on the back of your sale the sooner your lawyer can use the sale funds the sooner he/she can get you into your new home. Again the sooner that you can clear the house, the sooner you can be in your new Home.
Mortgage Lenders, Payments and Debts? After the sale the settlement cheque is banked and the debts start to be paid off (or ‘redeemed’). This may include any estate agency account, factors bills, government and loans/mortgages to be paid. As soon as all the debts are settled the remaining funds will be forwarded to the seller. Please ensure that you let your lender know and arrange to stop your payments to your bank at a mutual time agreed. It may be that if you have paid off to much due to when the loans are repaid, in this case the lenders either return the over payments direct to the seller or send to his/her solicitor (in this case your solicitors will forward this to the seller.
SALE OUTLINE Receiving the Offer
A brief outline of the steps in a sale transaction
Estate agents send you offer from buyer’s solicitors. Taking Instructions
Send copy to client and take instructions.
If not already done, get title deeds and send out fee quote and Terms of Engagement letter and request for money laundering ID. Preparing the Qualified Acceptance
Prepare qualified acceptance. (note in project title and other related documentation is available).
Send copy of the qualified acceptance to client. Seller’s Drafts
If title deeds are (or as soon as they are) available, or using a Registers Direct copy title sheet, draft Discharge, application for Advance Notice (Disposition), Legal Report and Letter of Undertaking
Apply for Legal Report.
If appropriate, write to factors and ask for confirmation re common charges and repairs and for details of the common insurance policy.
If first registration, also apply for Level 3 Plan Report Obtaining Reports
Apply for property enquiry certificate and (if property is in coal mining area) a coal mining report.
Request any other report (e.g. EnviroSearch) client has agreed in qualified acceptance to get.
Sending out Qualified Acceptance and Seller’s Drafts
Send qualified acceptance, title deeds (with any consents and guarantees), draft Discharge, draft Legal Report (or Legal Report and draft continuation thereof) draft Application for Advance Notice (Disposition) and draft Letter of Undertaking to buyer’s solicitors.
If first registration, also send Level 3 Plan Report as soon as available.
Formal Letter Replying to Qualified Acceptance Comes In with Seller’s Drafts (Revised) and Buyer’s Drafts
Receive from buyer’s solicitors formal letter replying to qualified acceptance, also title deeds and your drafts back marked as “revised”, and buyer’s solicitors’ draft Disposition and observations on title.
Send buyer’s solicitors’ formal letter to client and take instructions. Ask client for any information needed to answer observations on title. Check draft disposition is correct.
Send Discharge and any Retrocession of life policy to lenders for signature, ask for redemption statement. In fact most, if not all lenders at present will not release the signed Discharge until the loan has been redeemed at settlement of the sale in which event you will provide the buyers solicitor with a letter of undertaking at settlement. Most lenders do not require a formal Retrocession of life policy to restore ownership of the policy to a seller once the loan has been redeemed.
Replying to Buyer’s Formal Letter and Returning Buyer’s Drafts
Send to buyer’s solicitors a formal letter replying to theirs, return their drafts marked as revised and answer their observations on title. Signed Discharge Comes Back and Redemption Statement Comes In
Receive signed Discharge (and any Retrocession) from lenders and redemption statement.
Put testing clause on Discharge and draft Application for Registration form for it. Keep signed Discharge and completed Application for Registration form on file to await settlement. This will not apply to those lenders who do not release Discharges prior to redemption of the loan in which case the Letter of Undertaking procedure will apply.
Check with client that amount shown on redemption statement is correct. Explain you will pay this at settlement out of sale proceeds.
Put testing clause on any Retrocession and intimate to insurance company. Property Enquiry Certificate and Coal Mining Report Come In
Receive property enquiry certificate and coal mining report and send them to the buyer’s solicitors.
Finalising and Concluding Missives
Continue to exchange formal letters with buyer’s solicitors (sending each incoming letter to client and taking instructions from client for each exchange) until missives are concluded.
When missives are concluded advise client there is now a binding contract. Getting Disposition and Affidavit/Declaration Signed and Registering Application for Advance Notice (Disposition)
Receive from buyer’s solicitor’s engrossment (i.e. final finished version) of Disposition, with draft.
Compare Disposition with draft to ensure any corrections in draft are reflected in engrossment.
Arrange for client to sign Disposition and (if appropriate) Matrimonial Homes/Civil Partnership Affidavit or Declaration, unless there is a Matrimonial Homes/Civil Partnership declaration in the Disposition instead.
Complete Signing Schedule with details of where and when deed signed and name and address of witness.
Keep signed deeds and completed Schedule on file to await settlement.
Submit Application for Registration of Advance Notice (Disposition) to Keeper. Getting Searches
Apply for Legal Report or continuation thereof.
Send Legal Report or continuation thereof to buyer’s solicitors (the final legal report should disclose the Advance Notices for the Disposition and Standard Security).
Fee Note and Cash Statement
Prepare fee note and cash statement. Keep on file. Settle
Receive price, by solicitors cheque or bank transfer. Check whether covering letter contains instruction to hold as unencashed or undelivered until call from buyer’s solicitors.
When cheque can be cashed, or funds used, release (or authorise release) of keys.
Send cheque to lenders to redeem loan (note most lenders prefer that solicitors’ cheques have cleared and that the loan is redeemed some days after settlement allowing for clearance by electronic payment or CHAPS). Pay estate agents and any other outstanding accounts (if client has confirmed he wishes you to do this).
Send signed Disposition with Signing Schedule, any signed Declaration, signed Discharge with Application for Registration form and cheque for registration dues (or letter of Undertaking together with draft), title deeds with any consents and guarantees to the buyer’s solicitors. These days the arrangements are that the seller’s solicitor provides the purchaser’s solicitor no later than the date of entry with a signed Disposition and other settlement items to be held by the purchaser’s solicitor as “undelivered” pending it being agreed that settlement has taken place.
Sending Free Proceeds of Sale to Client
Deduct fee and outlays from remainder of price.
Send balance to client with receipted fee note and cash statement. Also send client any life policy with Assignation, Retrocession and copy intimation where appropriate and where the policy has not already been separately transferred by the lenders direct to the seller.
Finally
Advise Council Tax Office of the change of ownership. Only in certain areas of Scotland is it necessary for the solicitor to do this. In others, the seller and buyer make the necessary intimation themselves.
Written or verbal offers?, Offers made in Scotland that are to be binding need to be in writing. Verbal offers can be made, although this would usually be an informal agreement made between a seller and a prospective purchaser. Occasionally, a verbal intimation of a price may be used where the offer is speculative. For an offer to proceed to the stages of contract, it must however be in writing.
So you have a written Offer. Warning – At this stage remember that you do not have a binding contract (missives are not concluded). As such the purchaser can withdraw and decide to buy another property (withdraw the offer). Although not ethical it does happen, so be sure to tell your Estate Agent to keep marketing your property until missives are concluded. You must protect yourself. Also if you take your property off the market and then have to re-market your property again the law requires you to purchase a new Home Report! If you do go ahead and start booking removals and making plans please remember that no one has been bound by contract to purchase, you are not bound to sell the property either.
What will my Lawyer Look for Purchasing a property in Scotland is very much a case of ‘Buyer Beware’. There are normally limited warranties provided by Sellers after the date of entry and as such the purchasing solicitor must know what to check, examine and look for. It is not for the seller or the sellers lawyer to disclose problems (unless actively asked). To this end the purchasers lawyers asks and the sellers lawyers must provide the answers, searches and more often than not the persuasive facts to keep the deal moving and get agreement on the missives.
Sasine vs Land Register of Scotland Scotland is in a transition between 2 property registers. As such the purchasing Solicitors require to fix all and every minor property discrepancy before they can register the purchaser as the new owner. Due to the fact that the majority of ownership titles are based on deeds that can be as far back as the 1800’s, it is now surprise that the purchasing solicitors have many requests and questions. Ensure that your appointed lawyer is a property expert. It is our belief that this is not the time to appoint a multi disciplinary lawyer.
The Titles in brief - The titles to any property are similar to the log book for your car. Unfortunately they are a bit more complex an can throw up grey areas, especially if the deeds were drafted ambiguously. Which happens more than you may think and more than we like. The Titles Contain. Who owns the property, what debt is secured over the property, the boundaries, the burdens (rules of ownership) and a list of any other rights or people/companies who have an interest in the property (e.g. a public right of way, a shared access or shared septic tank). They will also go into detail in areas such as the owners rights to access the property, draw water, use services such as pipes, electricity and managing maintenance in the case of flats. All of these areas may raise questions by the purchasing solicitor. Tiles can easily date back to before the 1800’s and are in some cases incomplete. If you have further questions you can call and ask us as this is a very complex area.
What Do I Do As A Seller? Time to move. Once you have concluded missives you are contracted to sell and move out. Remember that you must not remove any items built into the fabric of the property unless specified in the missives. You must not damage or leave the property full of rubbish. Also note that your lawyer cannot obtain the funds for the sale until you have cleared the property and he/she can release the keys. So the sooner that you can remove all your property and have the house cleared the sooner your lawyer can have the property sold. In Scotland, settlement tends to be done by ‘Solicitors Cheque’ a guaranteed payment method. These funds will be required to clear in your lawyers client account before he/she can CHAP’s or BACs the funds to you. Ensure that you keep your phone charged and your lawyer knows this number as your landline has no doubt been switched off. If you are Buying on the back of the Sale – If you are buying on the back of your sale the sooner your lawyer can use the sale funds the sooner he/she can get you into your new home. Again the sooner that you can clear the house, the sooner you can be in your new Home.
The Scottish Standard Clauses (Edition 1), designed to represent a Scotland-wide approach to standard clauses for use in residential conveyancing transactions, came into effect on 5 January 2015 and were replaced by Edition 2 which came into effect on 3 May 2016.
It is hoped the Scottish Standard Clauses will lend greater certainty and efficiency in concluding missives than that afforded by the regime of regional standard missives.
All In The Detail
The basis of all property transactions is set in a binding contract, otherwise known as the missives. Many people make the mistake of thinking that the deal is done when in fact the parties are still negotiating the deal. When negotiating either party can walk away. In the absence of any pre-contract deposit or agreement, neither party would hold liability. Yet when is the contract binding? This is an issue that you must really check with your lawyer. Do not make the assumption or take anyone’s word for it as contracts are slippery at best.
Avoiding The Contract
So you have a contract and one party is in breach (not sticking to the deal) or attempting to get out of a contract? Even after contracts are concluded many lawyers place conditions within the contract which allow their clients to withdraw without cost if specific conditions are not met. The most general conditions tend to be around the searches over the property, coal reports, debt and insolvency and in many cases if the property is badly damaged. Again we must stress that you check with your conveyancing lawyers as not every contract is the same.
Shakespeare’s Advocate
The final throw of the dice is when the creative lawyer uses a legal gray area in the contract. Highlighted in Shakespeare’s Shylock – Merchant of Venice. Unfortunately this approach being less cut and dry is more use full as a line of argument if the parties go to court to settle the deal. This, in our opinion is never a very equitable path and negotiation or mediation may prove a better remedy.
Court Action
Over the years very few people tend to seek court action to enforce domestic contracts. Given these facts and costs involved we always urge clients to check and double check that they have all in place. Funds, documents, bank details and always work with your lawyer to ensure that things happen when they need to. Secondly, sellers ensure that all documents are in place and you help progress all the questions put to your lawyers by the purchasers. If purchasing ensure that all your funding is in place and you have clear instructions from your bank and your valuer. In all cases your lawyers work with you providing the expert advice and as such we urge you to call your conveyancing Lawyers if you have ANY legal questions.
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