Buying and selling a home in Scotland

At a glance

• Solicitors in Scotland typically take an active role in the buying and selling of property, much like an estate agent in the rest of the UK, rather than just dealing with the legal paperwork.
• Sellers are responsible for providing a ‘home report’ for all prospective buyers, which includes a survey and energy efficiency rating for the home.
• Once an offer has been accepted it becomes legally binding, and so instances of gazumping are rare.

The process of buying a house in Scotland is different to elsewhere in the UK, but this doesn’t necessarily make it more difficult. In fact, it can often make the process quicker with less chance of chains falling through, but this will depend on individual situations. So, if you’re conducting your property search north of the border, here’s a quick guide to buying and selling a house in Scotland.

Buying a house in Scotland

In many ways the initial stages of buying a house in Scotland will be similar to the rest of the UK. You’ll need to save a sufficient deposit, work out your affordability and overall budget, and start looking at properties. But there are still some key points to consider at each stage of the process.

Get a mortgage in principle

You should start by getting a mortgage in principle (MIP), which is a statement from the provider that shows how much they may be willing to lend you. You can use a mortgage calculator to get a rough idea, but a MIP will be much more accurate as it’s tailored to your individual circumstances.

Getting a mortgage in principle is always advisable, but it can be even more important in Scotland, where things can move quickly and an offer is unlikely to be accepted without one in place.

You’ll need to gather all necessary documents, including proof of income (find out what income counts for a mortgage application), evidence of where the deposit is coming from and an overview of your existing debts. You’ll want to check your credit score is up to scratch at this stage as well.

It’s important to note that, while mortgage products in Scotland are very similar to those in England, there are fewer lenders to choose from, and many of those will operate restrictions (such as granting a mortgage only for certain postcode locations). This means you may find your choice more limited, but this shouldn’t be a major problem unless you have very unusual mortgage needs. Speak to a broker for advice.

Appoint a solicitor

A key difference with the Scottish property market is that you’ll normally be buying and selling your home through a solicitor, not an estate agent. This means you’ll need to appoint one from the outset to ensure things can run smoothly, and you won’t be able to make an offer without one.

Your solicitor (or conveyancer) will take care of the entire process for you. They’ll register a note of interest when you’ve found a property you want to buy, they’ll run all necessary searches and submit the formal offer, and from there will deal with the legal paperwork, conveyancing and transfer of funds.

Find a property (and check the Home Report)

Once you’ve got a better idea of your budget and have appointed a solicitor, you can start your property search as normal, but you should check the Home Report of any property you’re interested in.

The Home Report is a collection of documents the seller must arrange before they can market their property. The report includes:

• A survey and valuation. A visual survey will have been carried out by a chartered surveyor who will note the condition of the property and any repairs or maintenance issues that could arise, and they’ll normally provide a valuation of the property as well. The information provided will be broadly similar to that offered by a Homebuyer Report, so you’ll need to decide for yourself if you want to arrange a more in-depth structural survey at a later date (find out more in our guide to mortgage valuations and surveys).
• An energy report. You’ll be able to see the property’s Energy Performance Certificate (EPC) which tells you its energy efficiency rating, giving details on how much energy it uses and how much it could cost you (roughly), as well as the environmental impact of the property in terms of things like carbon emissions. It’ll also give ideas for how the property’s energy efficiency could be improved.
• Property questionnaire. This will have been filled in by the seller and tells you additional information about the property. It covers 16 categories including the council tax banding, details of any extensions, alterations, specialist works or issues that may have impacted the property in the past.

It’s important to read the report carefully so you have a better idea of things like running costs and any potential maintenance or repair issues with the property, helping you decide whether you want to go forward or not.

This is a key difference to the property market in England and Wales, as you’ll get to see the results of the survey and will have plenty of additional information before you even make an offer. This can avoid unexpected surprises later down the line and can make the process a lot quicker, potentially saving you money as well.

Make an offer

If you’re happy with the information in the Home Report and want to go ahead, you can ask your solicitor to make a formal offer, otherwise known as a note of interest. This is a letter sent by your solicitor that includes details of the property and the price you want to pay, the date you’d ideally like to move in (known as the entry date), any items you want included in the price and any other conditions of your offer (such as if you want to conduct your own survey).

Offers are usually made in a sealed bidding system, whereby your offer will need to be submitted by the closing date specified, at which point the seller will choose their preferred bid. However, this may not simply be the highest price – it could depend on the conditions attached, your chain and situation as well. Their solicitor will then let you know if you’ve been successful.

This method can speed up the process and reduce bidding wars, but it can also make it difficult to know what to offer. However, properties are typically advertised at ‘offers over’, and given you won’t see any other bids it’s often advisable to go in with your best price from the outset, as negotiation normally isn’t possible. The exception here is if there aren’t any other interested parties, in which case you may be able to negotiate, or if the property is listed at a fixed price, in which case it may simply be who offers that price first.

Offer approved

If the seller accepts your offer, you’ll receive a ‘qualified acceptance’ letter to confirm this, along with any conditions attached to it. This essentially means that the property is yours providing the details can be successfully arranged.

At this point both solicitors will send letters/emails to each other to negotiate the conditions. These are known as the missives. You’ll receive any additional information that’s needed or requested, such as property deeds and legal enquiries, and the entry date – the date you’re hoping to move in – will be finalised. It’s also at this stage that your solicitor will confirm the mortgage details, and you’ll need to carefully go through everything with your solicitor to ensure you’re happy with the terms.

Contract agreed

Once both parties are happy, you’ll ‘conclude the missives’ and will have a legally binding contract. This is the Scottish equivalent of exchanging contracts in England and happens much earlier in the process – if you back out now, you’d be liable to pay the seller damages, which could amount to tens of thousands of pounds (this is why gazumping is a lot less common in Scotland, though it still isn’t illegal).

It’s also at this point that the seller passes the legal title of the property across to the buyer. If they fail to do this, the buyer may withdraw from the deal and seek damages from the seller.

Why is gazumping less common in Scotland?

Due to the differences between the Scottish and English methods of house sales, home purchases in Scotland tend to fall through less often than in England, and gazumping is incredibly rate.

This is most likely because anyone selling their home will have already spent money on a Home Report, while solicitors cannot continue to represent a seller who goes with a different buyer. Once the missives have concluded everything becomes legally binding and it can cost a lot of money to pull out, so things should theoretically progress much more smoothly.

Next steps

Once the missives have concluded, things can move a bit faster than elsewhere in the UK. You’ll now have to formalise your mortgage with a full application (find out more about how to improve your chances of success and the credit score you’ll need), arrange any additional surveys if you want them and find suitable home insurance (it’s often recommended for insurance to start once the contract is agreed, rather than on the moving date).

Meanwhile your solicitor will run any searches, complete the final checks, attend to the Land Registry transfer and request funds from the mortgage lender – essentially, they’ll deal with any other legal requirements before the sale makes it over the line.

They’ll also write up the disposition (the contract that transfers ownership to you as the buyer) and will send you a completion statement which outlines any additional costs involved, such as conveyancing fees and the Scottish equivalent of stamp duty (find out more in our guide on the costs of buying a home). Once everything’s complete and you’ve hit your entry date, the property is yours. Congratulations!

Land and Buildings Transaction Tax

In Scotland, there is no stamp duty on residential home purchases. Instead, buyers will have to pay Land and Buildings Transaction Tax (LBTT). Unlike in England, where stamp duty starts for homes valued over £125,000, in Scotland, the LBTT is £145,000.

However, first-time buyers in Scotland will only pay LBTT on new properties that are worth more than £175,000, while buy-to-let and second homes attract LBTT on properties in excess of £40,000.

Selling a house in Scotland

If you’re selling a house in Scotland rather than buying, you can again expect some differences compared to the rest of the UK. Here’s what to look out for at each stage.

Find a solicitor

Your first step will be finding a solicitor, as they’ll need to check the title deeds and carry out local searches to make sure there’s nothing that would stop you from selling your home. They’ll deal with all other legal aspects throughout the process, and while you don’t technically need one to market your property, you’ll need one for the conveyancing and transfer.

Arrange your Home Report

As the seller, you’re required to have a Home Report prepared before you can even put the property up for sale. This applies to all residential properties, though there are a few exceptions (such as those that have been converted to residential use, new builds or seasonal holiday homes).

As outlined above, this report contains a property survey, details of the premises’ energy efficient rating and a standard questionnaire. These reports give a lot of information as to the condition and value of your property and are designed to help reduce the number of sales that fall through, due to buyers having more details to hand before they think about making an offer.

You have to pay for this report – which is typically around £500 depending on the value and location of your home – but buyers can have a separate survey undertaken on your property should they wish. However, this can only be done after their offer has been accepted. You should also note that you must give the report to any buyers who request it within nine days (you can be fined if you don’t), and it’ll remain valid for the sale process providing you don’t take your property off the market for more than 28 days.

Advertise your home

In Scotland, solicitors often take on the role of estate agents, so you’ll rarely need to market your property through a separate estate agent (unless of course you choose to). You’re also free to advertise your property yourself should you wish, though again, you’ll still need a solicitor to deal with the legal aspects.

Most properties in Scotland are advertised at ‘offers over’, where you’re asking for all bids to come in over the minimum amount specified. However, you can also advertise it as ‘offers in the region of’ or even at a fixed price, but these are less common.

Receive offers

Once you start advertising your home you’ll hopefully have offers coming in. These will usually be sealed bids, and you’ll be expected to set a closing date, or a deadline for receiving them. Your solicitor will gather all the offers together and you’ll be able to open them on the closing date, and from there can select your preferred bid.

Note that this may not necessarily be the highest bid, though it depends on your requirements. For example, some offers may be unconditional whereas others will be conditional, and will have certain requirements attached. You may decide that a slightly lower but unconditional offer will be more suitable than a higher conditional one, so it’s important to discuss everything with your solicitor.

Once you’ve chosen your preferred offer your solicitor will send a qualified acceptance letter to the buyer’s solicitor, and from there they’ll exchange missives in order to iron out the details. Be expected to provide any additional information requested by the buyer, and make sure to set a mutually agreeable moving date.

Finalise the contract

Once everything is agreed, a concluding missive will be drawn up and the sale will be legally binding. You’re now expected to remove the property from the market and cannot accept any new offers or back out of the sale without being liable to pay compensation to the buyer. If you are approached with another offer that you want to accept, you’ll have to go through a different solicitor and will be expected to pay a lot in damages.

Transfer ownership

From here you can expect some final checks from the buyer, and may need to facilitate their additional property survey if they wanted to go through with one. Your solicitor will start the conveyancing process to transfer ownership to the new buyer, and they’ll arrange repayment of your current mortgage to your lender (as well as arranging your new mortgage deal if you’re moving to a new property).

Finally, you’ll need to sign the disposition, or the contract that legally transfers ownership to the buyer. Your solicitor will check the details and, if you agree, you’ll sign the document before the settlement (when the buyer becomes the new owner), and will hand over the keys.