Mortgages in Scotland

How is the house buying process and mortgages different in Scotland?

Should you be about to buy a house in Scotland you would benefit from learning the right way to go about it. This is vital for anyone moving from England to Scotland who may be used to the English system. For example, in England, the contract is legally binding towards the end of the house buying process. In Scotland, it happens at a relatively early stage.

The contract in Scotland is in the form of a series of letters. These are known as missives, and are signed by both the buyer and the sellers' solicitors. Should the offer be accepted on all points, then you are in a legally binding contract with neither party able to withdraw without being held completely liable for any consequent losses for the other party. Therefore, unlike England, where you make the offer to the estate agent, you shouldn't make an offer in Scotland unless it's through your solicitor.

This is even more important to understand if you are buying a property in Scotland with the proceeds of a property in England. Your English solicitor must push the sale through as quickly as possible, as you are committed to a property in Scotland so much quicker. Furthermore, you need to use a separate, UK solicitor, as Scotland has a separate and distinct legal system.

So, the UK system works like this: Properties are marketed on an "offers over" basis. This is an indication of the price the seller has been advised to ask for. A lower offer could still be accepted. It all depends on the competition. You should get a survey or at least a valuation first as an offer 'subject to survey' may not be accepted at the closing date.

When you make an offer, you will name a settlement date which may be weeks or months ahead. You will need to have funds available on that date. If not, then maybe your bank will agree a bridging loan to help you out.

The selling agents can be asked to note your interest, so that should another party offers you may be given the chance to submit a competing offer, and a closing date is fixed.

Eventually, the closing date is set and you will be invited to submit your offer by that date and time. You are in a blind bidding situation, but it means the seller will get a good price. You may be beaten on this bidding process and your survey and valuations costs will be wasted.

Should your offer be successful, the two solicitors negotiate the missives, which are formal letters dealing with the finer points of the contract. Then you are contractually bound to buy the property. You can't get gazumped, and that is the main difference.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

© AskFinancially.com 2009

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