Buying a property can be one of the most significant transactions in your life. To ensure that the transaction is carried out as smoothly as possible you need a solicitor who can explain the procedure and help guide you through the process. That process involves assisting in identifying the right property to meet your needs, reviewing any Home Report and Survey to ascertain if there are any issues with the property and making you aware of these, assisting with arrangements for financing the property and submitting a formal offer to purchase on your behalf.
You will be issued with our firm’s Terms of Business for signature which sets out details of who will be carrying out your transaction, the fee structure and nature of the work. Prior to us undertaking any legal work for you we require to obtain photographic identification e.g. a passport or driving licence together with address identification dated within the last three months, such as a utility bill or bank statement showing your home address. On receipt of this we can proceed to act on your behalf and have complied with Money Laundering Regulations set out by the Law Society of Scotland.
Our estate agency team are here to guide you through the process of buying your new home. We understand that buying can be a stressful experience. With our client-focused service and commitment to achieving the best results, we work hard to alleviate any stress by delivering efficient results with minimal setbacks.
In recent years, as a potential purchaser, the most common place to search for a new property is through online property portals such as Rightmove. Our solicitors are all local people and can use their local knowledge of Ayrshire to help you find the right property for you.
As soon as you have found a property which you are interested in, you should ask us to note interest in that property on your behalf. This involves contacting the selling agent (usually Estate Agents or Solicitors selling the property) to intimate your interest. Noting interest does not create an obligation on you to purchase the property, but after interest is noted you will receive updates from the selling agents about the sale, for example, if a closing date has been set for the property. A closing date is a date in which all offers have to be received for the property.
After noting interest in a property, we will request a copy of the Home Report for the property from the selling agent. This includes a Property Questionnaire which is a series of questions the title owner answers in respect of the property. It also comprises a Surveyor’s Report on the property’s condition and also an Energy Performance Certificate, which details the energy efficiency rating for the property. Home Reports contain a lot of information and if you have any queries, one of our solicitors can discuss matters further with you.
In certain circumstances, even although a Home Report is available for the property, you may want an independent report carried out over the property you are thinking about purchasing. It may be the case that your mortgage lender requires a separate report, for a second valuation or a more detailed survey report.
Prior to submitting an offer for the property, it is essential that you have fully considered how the purchase will be funded. You may wish to seek financial advice from our experienced Independent Financial Adviser, Alan Hewitt, who can arrange mortgages. This will allow you to gain an idea of the price range of properties you can make an offer on, based on what you can borrow, prior to you entering into a binding contract.
When you have found a property you like and have considered how you will finance that purchase, you will have to decide how much you would like to offer. Where there are a number of interested parties, the seller’s agents may set a closing date, a date whereby all interested parties must submit their best offers, often this would be a figure over the asking price. In the event that you are the only interested person or if the property has been offered at a fixed price, it may be the case that you can submit an offer straight away. Once you have made a decision on the amount you wish to offer, one of our solicitors will take your instructions, prepare a formal offer, sign it off on your behalf and send it to the selling agents. If you are undecided what price to offer, our solicitors will guide you.
Formal Offers must always be submitted by Solicitors. Where a verbal offer has been given, that is not binding and informal offers are unlikely to be considered effectual.
It is usually the case that where a closing date has been set the seller will accept the highest offer, however the seller may accept one of the lower offers instead for another reason, such as if there is a more suitable date of entry. You will tend to hear after a few hours of submitting the offer whether you have been successful. If the offer is verbally accepted by the seller a written acceptance will follow (known as a qualified acceptance) from the solicitor acting for the seller’s solicitor.
Once we have received the written acceptance we will issue you with a copy, and ask you to thoroughly consider the terms. If there is anything you are unsure about we are on hand to assist you. Once you confirm to us you are satisfied with the terms of the Qualified Acceptance, we can then reply to the seller’s solicitor with a formal response. The seller’s solicitor will then obtain their client’s instructions and revert to us with their own reply. This exchange of formal letters will carry on, until both parties are satisfied all outstanding points have been fulfilled.
When there is agreement between the parties and no further points have been raised, a binding contract is concluded. The legal terminology for this is concluded missives. You should be aware that at this point in the process, although you have not been asked to sign any documentation so far, you are completely tied into the terms of the contract. We can discuss with you any penalties which will arise in the event you do not pay the purchase price timeously without the seller’s consent.
Having obtained the title deeds to the property, we will carry out a thorough review and report this to you in understandable terms. This will include a description of the property, a plan showing the extent of the subjects (where available), and any rights or conditions over the property which you need to be mindful of. Such conditions are referred to as title burdens which can relate to things such as, use restrictions, parking restrictions, restrictions on what alterations can be carried out, common repair obligations and insurance obligations. These are just some examples of title deed conditions.
In order to transfer ownership of the property title into your name we require to draft up a legal document called a Disposition. This is signed off by the seller. Where a loan has been arranged over the new property, you are required to sign off a document called a Standard Security. This document imposes a number of conditions and rights in favour of the mortgage provider and in the event that you default on repayments, your mortgage provider may take ownership of your property and can sell it on. We can provide you with information on the consequences of signing such an agreement.
In addition to the purchase price there are a number of other costs involved in buying a property. In April 2015, Stamp Duty Land Tax has changed to Land and Buildings Transaction Tax (This is a tax which is paid to HM Revenue and Customs based on the purchase price of the property). The revised tax rates and bands for residential property transactions are as follows:
|Up to £145,000
|£145,001 to £250,000
|£250,001 to £325,000
|£325,001 to £750,000
|£750,001 and over
As well as LBTT, a fee is also due to the Registers of Scotland who carry out registration and formal recording of all new titles into the Land Register. We will issue you with a Cash Statement prior to the date of entry to let you know the full amount due by you in order to have the transaction settle timeously without any problems. We will then pay out all the outlays on your behalf.
The date of entry is the date in which the transaction is completed. On that date, the purchase price is paid out to the seller’s solicitor and, in return, we receive the signed title deed transferring the title over to you. Once these steps have been completed the keys can then be released to you.
We will proceed to pay out the Stamp Duty on your behalf and Register the Deeds with the Land Register of Scotland. Once the deed has been registered we will receive a copy of the updated title sheet and the title deed documentation will usually be sent on to your mortgage provider for their retention.
Prior to completion of the purchase of your new home, it is essential to ensure you have appropriate insurance cover in place for both the building and contents. Additionally, if you have not already done so, it is a good time to consider drawing up a Will or refreshing an existing Will – particularly if you are purchasing the property with another person. Contact us if you require further information on making a Will.
The Home Report, missives and titles will provide much information on the property, but you should be aware that some things may not be included. It is your responsibility as purchaser to ensure you are satisfied with all aspects of the property. If you have any concerns you should consult your solicitor who can advise if any further investigations or reports are required.
If you have a query or wish for some advice please make an enquiry or contact one of our offices directly and a member of our team will be happy to assist.