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ELP SOLICITORS’ GUIDE TO BUYING PROPERTY
There are several stages involved in buying property:
Here is a brief explanation of these various stages in turn:
OFFERING FOR A PROPERTY
The first stage in purchasing a property is to make an offer and have your offer accepted by the sellers’ solicitors or estate agents. The procedure for making an offer and having your offer accepted depends on whether the property is advertised as “offers over” or “fixed price”.
Offers Over
If you are interested in a property which is advertised as “offers over” you should ask us to note interest with the sellers’ solicitors or estate agents on your behalf. This does not bind you to anything and means that the sellers’ solicitors or estate agents will let us know if a closing date is set for the property.
If a closing date is set, you can then decide whether you wish to offer at the closing date. However, if no closing date has been set then the sellers can accept an offer from any party at any time and it may therefore be worth considering making an offer for the property at that stage. If there is a reasonable level of interest in the property it will usually be in the sellers’ interests to set a closing date.
Fixed Price
Where a property is advertised as “fixed price” the general idea is that the first offer at the fixed price received by the sellers’ solicitors or estate agents will be accepted by the sellers, unless there is some reason for the sellers to refuse the offer.
Therefore, if you are interested in a property which is advertised as “fixed price” it is important to submit your offer as quickly as possible to try to avoid the possibility of someone else offering before you.
Offering Subject to Survey
It has become standard practice in Edinburgh for offers to be made subject to survey (and usually also subject to valuation). If your offer subject to survey is accepted by the sellers’ solicitors or estate agents on behalf of the sellers, you will be expected to have your survey carried out as quickly as possible (usually that day or the following day), and to confirm very shortly thereafter whether you are happy to proceed with the purchase on the basis of your survey report.
We can help you with instructing a survey and we will usually receive the verbal survey report from the surveyor and then discuss this with you.
Under Offer
Once you have had an offer accepted by the sellers’ solicitors or estate agents, you have had a survey carried out (if necessary), and you have confirmed that you will be proceeding with the purchase on the basis of your survey report (subject to any conditions if appropriate which have been accepted by the sellers), the property is treated as “under offer” to you.
The sellers’ solicitors or estate agents will usually withdraw the property from the open market at this stage.
You should be aware that when you instruct us to submit an offer for a property on your behalf, the sellers will expect you to be willing to conclude the contract for the purchase within a reasonable time (usually around 1-2 weeks). If this is not the case, we must tell the sellers’ solicitors and the sellers will then decide whether they are still willing to sell the property to you. If they are not willing to wait for you to conclude the contract they may decide to re-market the property.
CONTRACT (ALSO KNOWN AS “MISSIVES”)
The offer is only the first part of the contract and it contains many conditions. The sellers’ solicitors will send a copy of our offer to the sellers and then discuss all of the conditions with the sellers and help them to decide which ones they are happy to accept, which ones they would like to reject, which ones they would like to change, and also whether they wish to add any further conditions into the contract.
The sellers will usually wish to make at least a few changes to the contract, and the sellers’ solicitors will send us a letter known as a Qualified Acceptance which sets out these changes. We will discuss these changes with you and if you are happy to accept them we will send a letter to the sellers’ solicitors confirming that you accept the changes and that the contract is now concluded (i.e. legally binding).
If you want to make further changes to the contract then we will send a letter setting out these changes to the sellers’ solicitors. The sellers’ solicitors will then send a copy of our letter to the sellers and discuss the changes with them.
This procedure continues until one party is happy to accept all of the conditions in the last letter from the other party’s solicitors. As soon as a letter is sent from one party’s solicitors to the other party’s solicitors accepting all of the conditions in the other party’s solicitors’ last letter, the contract is concluded and legally binding. The process of concluding the contract usually takes around 1 – 2 weeks from the date on which the property is “under offer”. Until the contract is concluded, either party can pull out of the transaction without penalty.
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CONVEYANCING
Conveyancing is the process of transferring title from the sellers to you. The sellers’ solicitors will send the title deeds for the property to us so that we can examine them on your behalf. We will write to you advising you of the description of the property and any title conditions affecting the property.
If there are any problems or issues arising out of our examination of the title deeds we will deal with these as appropriate.
We will draft the title deed (known as the “Disposition”), which will be signed by the sellers to transfer the title to you, and the forms to be submitted to Registers of Scotland to register your title as owner of the property. If you are getting a mortgage, we will also draft the Standard Security for you to sign in favour of your lenders. This is the document which gives your lenders the right to repossess your property if you do not comply with your mortgage conditions (the most important of which is to pay your monthly mortgage payments).
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SEARCHES AND OTHER DOCUMENTATION
As part of the conveyancing process we will examine various searches over your property which will be sent to us by the sellers’ solicitors. One of these is called a Property Enquiry Certificate, which covers all Local Authority matters relating to your property, e.g. roads, Building Warrants, Planning Applications, Listed Buildings, Conservation Areas, Statutory Notices etc.
Secondly, we will see a search of the Sasine Register, the Land Register, the Register of Inhibitions and Adjudications, and the Register of Insolvencies.
This search discloses the current owners of the property, whether there are any outstanding Standard Securities (i.e. mortgages) over the property, whether any other relevant deeds relating to the property have been registered, and whether the sellers have been inhibited or sequestrated (as this may affect their ability to give you clear title to the property).
Finally, if the property lies in a Coal Mining Area it may be necessary for us to see a Coal Mining Report to check whether there are any mining issues affecting the property.
If your surveyor advises that we should see documentation for alterations, damp-proofing work etc. then we will check that this documentation is available and if not we will advise you accordingly and decide what action, if any, should be taken.
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SETTLEMENT OF THE PURCHASE
On the agreed date of entry we will pay the purchase price to the sellers’ solicitors on your behalf (usually by way of solicitors’ cheque) in exchange for the keys, the Disposition by the sellers in your favour, the rest of the title deeds, and any other relevant documentation. We usually send our cheque to the sellers’ solicitors the day before settlement to arrive on the morning of settlement, and likewise the sellers’ solicitors usually send the keys, Disposition, title deeds etc. to us the day before settlement to arrive on the morning of settlement.
Settlement takes place as soon as both parties are in a position to settle, which will be when both parties’ solicitors have received the appropriate settlement items from the other party’s solicitors, when we have all your money in our account so that we can authorise the sellers’ solicitors to cash our cheque, and when the sellers’ solicitors have confirmed that we can release the keys to you.
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POST-SETTLEMENT
After the purchase has settled we will deal with submitting the Stamp Duty Land Tax Return to the Inland Revenue and registering your title as owners of the property.
When we receive the Land Certificate back from Registers of Scotland we will check it and then, if you have a mortgage, we will send it along with the other relevant documentation to your lenders, or if you don’t have a mortgage we will keep the Land Certificate and other documentation in our deeds safe for safekeeping or forward them to you so that you can arrange to keep them in a safe place of your choice. We will also send a copy of the Land Certificate to you so that you have it available for reference at any time.
If you have any questions on buying property or would like any more information, please get in touch with us.
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