HBC™ Quick Guides
HBC™ Quick Guides
Understanding The Sales Process
Have you ever considered how many individuals and firms can make huge money by buying and selling property?
This interactive conveyancing guide was prepared by Scottish Expert Property Lawyers. ‘If you want to avoid stress and delay then this guide is for you’. Each stage is highlighted by practical tips and advice. The do’s & don’ts. Expert advice is always on hand at the end of the phone so if you have more questions or you are looking to gain specific advice we are only a quick call away
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 that 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 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.
Missives is the formal name for the legal contract between seller and buyer in Scots law. It starts with a written offer usually from the purchaser’s solicitor. Even if you verbally accept this offer there is no contract binding both parties at this stage. Several written amendments can pass back and forth between solicitors (known as Qualified Acceptances) and still there will be no binding contract. Both or either party can withdraw at this stage as there is no contract. It is not until BOTH parties agree in writing to ALL the terms of the contract (missives) that the missives re concluded. 1. Agree the terms of the missives early but have conditions which the seller has to fulfill – not so good for the seller. Warning – If conditions are not satisfied in full the purchaser can sometimes escape (rescind) the contract. 2. Satisfy all the terms in the missives and then conclude the missives. Good for both parties as neither can withdraw and the seller is not running about to satisfy the purchasing solicitors further than is required in terms of the contract.
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 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.