Buying a House in Scotland - Step-by-Step Guide

According to the National Records of Scotland, there were more than 2.67 million homes in Scotland in the year 2021. That’s a lot of properties to choose from! Where do you start? When trying to find a property that you are interested in purchasing, you have several options:

• Work with a solicitor or estate agent: In order to find out about properties that are on the market, you can instruct a solicitor or estate agent. Once you have found a property that you like, your solicitor will be able to advise you on the legal aspects of the purchase and help to negotiate the price on your behalf. Click here to speak to one of Pacitti Jones’ dedicated buying teams.
• Use an online search engine: You can also use an online search engine to find properties that are for sale in your desired location. A simple internet search can yield a list of properties that are currently on the market. You can view photos, and videos, and even take virtual tours of the homes before making a decision to view the property in person.
• Take a walk: Do you already have a neighbourhood in mind? Try taking a walk around the area to see if there are any “For Sale” signs. This can be a great way to find a property that you may not have otherwise come across. You may even stumble across open houses and viewings this way.

A home report is a document that is required by law when selling a property in Scotland. It contains information about the condition of the property, as well as an energy report and a mortgage valuation, which can be used by any borrowing provider to help determine the maximum amount of loan they will provide on the property, subject to your own personal circumstances. The home report will help you to understand the condition of the property before making an offer.

You can get a home report from the selling agent, who must provide you with a copy if you request it. Occasionally the agent may request a low fee, although this is not common. In most cases, the home report will be free.

More information on home reports is available here.

If you wish to get more detail about the home or you are concerned about any of the information in the home report, you can instruct a specialist report for the property at your own expense.

At Pacitti Jones, we will review the Home Report and advise on any specialist reports that may be needed.

Once you have found a property that you wish to purchase, you will need to arrange your loan. You can do this by taking out a mortgage from a bank or building society. The amount that you can borrow will depend on your income and outgoings, as well as the value of the property.

Our mortgage advisers at Pacitti Jones can help you to arrange your loan and will liaise with the lender on your behalf. It is important to note that you should have your loan approval in principle in place before you can make an offer on a property.

It is also useful to speak with a mortgage broker before you begin searching for properties, as this will let you know how much you can borrow and what kind of property you can afford.

You’ve arranged your loan approval in principle, found a property, and searched through the home report – now you’re ready to make an offer!

The first step is to let your solicitor know that you wish to make an offer on the property. They will then get in touch with the selling agent to have your interest formally noted, obtain necessary information regarding the property, and negotiate on your behalf.

In Scotland, all formal offers must be sent from a solicitor to the seller’s agent/solicitor, so you’ll need to instruct a solicitor before you can make an offer. Before commencing work for you, your solicitor is legally required to carry out Anti Money Laundering checks on you and anyone else who will be purchasing the property with you.

Once the selling agent has received your offer, they will present it to the seller. The seller will then have three options: they can accept your offer, reject your offer, or make a counteroffer.

If they accept your offer, congratulations! You are one step closer to purchasing your new home. If the seller rejects your offer, don’t be discouraged, this is not uncommon, as it may simply mean that the seller is not willing to sell their property for the price that you have offered, or they wish to continue marketing to attract other buyers. In this case, your solicitor will continue to pursue and negotiate on your behalf until an agreement between the parties is reached. If the seller makes a counteroffer, it will then be for you to decide whether you pay the price requested to secure the property, or whether you go on to counteroffer or negotiate further.

If your offer is accepted in principle, the legal process of buying a property begins.

During this stage, the seller’s solicitor will issue the formal acceptance to the offer (called ‘qualified acceptance’), which forms part of the contract between the seller and the buyer known as the ‘missives’.

‘Missives’ are constituted by an offer, qualified acceptance and any subsequent formal letter issued by the solicitors acting on behalf of the seller or the purchaser. The contract will set out the terms and conditions of the sale, including the price, the date of completion, and any special conditions that have been agreed upon. It can take a number of weeks until a consensus on the terms of the contract is reached.

Once the contract is established (ie missives are unconditionally concluded), you cannot withdraw without a penalty. If you fail to settle the transaction on the agreed date or meet any other conditions of the contract, you may be liable for damages. Therefore, it is very important that you understand all of the terms and conditions of the contract before agreeing to it.

Once the missives are complete and you have paid the deposit, your solicitor will request the title deeds from the seller. These documents will prove that the seller is the legal owner of the property and that they have the right to sell it.

Your solicitor will check over these documents to ensure that everything is in order and that there are no outstanding issues that could cause problems later on. Once they are satisfied, they will send you a copy of the title deeds so that you can check them over yourself.

You will also review title burdens, which are legal restrictions on the use of the property. These may include things like a right of way for a neighbouring property or a condition that the property can only be used for residential purposes.

In order to transfer ownership of the home to your name, your solicitor will need to draft a new title deed, called a ‘Disposition’.

If you are taking out a loan, you will also need to sign a mortgage document that outlines your commitment to repay the loan. This document will explain the terms of your loan and what happens if you fail to pay it back. Often, failure to pay means that the mortgage lender can take possession of your home. Your solicitor will carefully review these documents with you to make sure that you understand them before you sign.

The final step in the process is to transfer the purchase price of the property from your bank account to your solicitor’s bank account, which needs to be done in advance of the date of completion. Your solicitor will then transfer the purchase price to the seller’s solicitor, who will then send the proceeds, net of their own costs, to the seller. This is known as “completion”, and it usually takes place on the date that was agreed upon in the missives.

You will also be liable for any other costs, such as the Land & Buildings Transaction Tax (formerly known as Stamp Duty Land Tax) and the fee charged by the Registers of Scotland for maintaining property records.

Once the funds have been transferred, and all of the paperwork is in order, the property is officially yours. Congratulations on becoming a homeowner!

Now that you have completed the purchase, you will need to insure your new home against fire, theft, and other risks. You should also consider taking out buildings insurance to protect your investment in case of any structural damage. Please note that if you have taken out a mortgage to help fund the purchase, you will need to have building insurance in place from completion.

Recent legislation requires all homeowners to have adequate smoke & fire alarms installed. Failure to do so upon taking entry can impact your insurance.

There are many different types of home insurance policies available, so it is important to compare them and find one that meets your needs and budget. Once you have found a policy that you are happy with, you simply need to begin paying the premium to enjoy peace of mind in your new home.