Making an offer for a home or property in Scotland
The Art of Making an Offer: A Guide to Buying a Home in Scotland
Although there is lots of jargon surrounding the property market, it is worth getting your head around it. Taking the primary step to secure your dream home doesn't have to be difficult.
How to make an offer for a property in Scotland
Unlike making a formal offer in England, there are a variety of steps you've got to take before you'll put an offer on a property in Scotland.
The process generally follows this sequence and timeline:
- Arrange a mortgage in theory
- Find a property you wish
- Choose your conveyancer or solicitor wisely
- Examine the Home Report
- Arrange property searches, however this is usually conducted by your solicitor
- Submit a 'note of interest'
- Confirm your affordability and finances
- Make your official offer
Arrange a mortgage in theory
A mortgage, in theory, may be a letter from a mortgage lender stating that they're happy to lend money to you (if a property meets the right criteria) along side an estimation of what proportion you'll, in theory, afford to borrow. Most people refer to this as an agreement in principle. Arranging a mortgage in theory demonstrates to sellers that you've got considered your financial situation and shows what proportion you'll afford to spend. Many sellers won't consider offers from buyers who can't show they're in the financial position to proceed.
If you do not need a mortgage, you will need to be ready to demonstrate that you simply have the cash available to get the property outright (plus any additional fees like LBTT).
Find a property you wish
Once you recognize what proportion you'll spend, you'll start the fun part: finding your dream home. most of the people start their search on online property portals, or by lecture local estate agents. Signing up for alerts from a couple of different local estate agents will assist you get the primary check out new-to-market properties.
Choose your conveyancer or solicitor wisely
It's at now you ought to consider hiring a solicitor or conveyancer if you haven't already. you will need a solicitor if you propose on making a suggestion, and finding someone you would like to figure with early within the process will prevent rushing at the eleventh hour. It's worth shopping round for the simplest conveyancer you'll - they're going to be your negotiating representative, and are vital to making sure your sale goes ahead smoothly. A good example of this is Lanarkshire Law Practice. They have over 30 years conveyancing experience and they are very easy to instruct on your behalf.
Examine the Home Report
Once you've found a home you wish, request the house report from the realtor. you ought to look around this with your conveyancer. Pay particular attention to the results of the property survey, which can offer you insight into the condition of the property, and therefore the property valuation.
Arrange property searches, however this is usually conducted by your solicitor
If you're proud of everything within the home report, you'll now arrange searches on the property. Searches are investigations into the property and therefore the local area. These will provide information about the land the building sits on, and any local developments you would possibly want to remember of. for instance, an enquiry will allow you to skills in danger a property is of flooding, or if there are plans to create a motorway near the house.
You can do searches after submitting a formal offer, thus avoid paying any search fees. However, this will make your offer less appealing to the vendor, particularly if there are other buyers interested. Ask your conveyancer for his or her advice before making a decision.
Submit a 'note of interest'
If you're satisfied of everything you've seen thus far, it's now the right time to notice your interest. A note of interest doesn't tie you into buying the property. It's simply a letter to the seller's solicitor saying that you want to be maintained so far with any developments associated with the property, like the setting of a 'closing date' (the deadline for sending formal offers). This letter are going to be submitted by your conveyancer. At now the seller's lawyer might disclose how many other notes of interest the property has received.
Confirm your affordability and finances
Once you've expressed your interest, it is time to verify your finances. Your mortgage provider will want to understand that the house you would like to shop for is well worth the amount you would like to borrow. Your lender may use the valuation provided within the home report, or they'll request an independent valuation.
Make your official offer
Once you've confirmed that you're going to be ready to borrow the cash you would like, you'll place an offer. In Scotland, instead of calling the estate agent, your solicitor will write a suggestion letter to the seller's solicitor or send this letter to the estate agent initially. If a deadline has been specified, the seller's solicitor will open all the offer letters on the required day. You ought to expect to receive a response shortly after.
What should your offer include?
Submitting your offer isn't as simple as telling the vendor what price you're willing to pay. Your conveyancer will have to send a formal letter, including the subsequent details:
- Property description
- Offer amount
- Proposed date of entry
- Any Extras?
- Conditions of sale
- Deadline for acceptance
If your offer is accepted, the seller's conveyancer will reply with a letter of either 'qualified' or 'unqualified' acceptance. 'Qualified' acceptance means your offer has been provisionally accepted subject to some additional conditions. An 'unqualified' acceptance means your offer has been accepted as you presented it, with no extra conditions.
Do you need a solicitor to form a suggestion on a property in Scotland?
Yes, in Scotland, you've got to possess a solicitor so as to form an offer on a house. This is often because your offer letter is technically the primary basis of the missives which will eventually form the ultimate contract of the house sale. Verbal or informal offers sent directly from a buyer to a seller are impossible to be taken seriously.
Formal or informal offers on a house are not legally binding in Scotland unless submitted by a solicitor.
A property purchase in Scotland only becomes binding with the 'conclusion of missives'. Missives are letters between your conveyancer and therefore the seller's conveyancer, during which they negotiate the conditions of the property purchase.
Your formal offer is technically the primary 'missive'. While on it's own, is not legally binding, it can quickly become so should you wish to proceed further with the property. If the seller's solicitor responds with an 'unqualified acceptance', agreeing to all or any the terms that you've got laid call at your offer letter, the acquisition will become legally binding. At now there'll be financial penalties for withdrawing. If it is a qualified acceptance then it means they accept the offer depending on certain conditions. Therefore, you ought to only make an offer if you're prepared to be legally tied into the sale very quickly.
If you're curious about buying a house, but aren't 100% sure that you're able to make an offer?
Remember you can submit a 'note of interest'. Noting your interest doesn't oblige you to form a proper offer, however, you'll be maintained so far with any developments concerning the property sale, including interest from other buyers. this could offer you time to make a decision whether fixing a suggestion is true for you, before you commit.
How much do you have to offer on a property marketed as 'offers over'?
In Scotland, it's extremely common for a property seller to invite 'offers over' a particular selling price, unlike in England where it is common practice to offer below the asking price.
Usually, properties are going to be priced competitively so as to draw in interest from variety of buyers. Then the vendor will set a 'closing date' by which all the interested buyers need to submit their best and final bids. These bids are normally sealed, so you will not skills much the opposite buyers are offering. this will cause buyers making offers that are much above the selling price.
Before you submit your sealed bid, look around the valuation included within the home report carefully. Your mortgage lender is unlikely to permit you to borrow quite this amount - if you opt to supply over the valuation amount, you will need to form up the difference. you'll also want to think about the condition of the property & potential costs of repairs. If you're unsure what proportion this stuff will cost to require care of, request some estimates from independent tradespeople within the area.
It also can be helpful to seem at property market trends within the local area. what proportion have recent similar properties sold for? How long did it deem other properties on the market to sell? This information can help to supply you a general sense of what's an inexpensive amount to offer.
You could also use a web valuation tool to urge a fast estimate of what proportion the property is worth. Our free valuation tool combines data about recently sold properties in your area with information you input about the condition and unique features of the property. Combined with the house report valuation, and your mortgage lender's limitations, this estimate will offer you a way of what proportion is cheap to supply. Check it out here.
Top tip: If no deadline has been specified on a property that's soliciting 'offers over', this might mean that no-one else has noted their interest. during this case, you'll be ready to negotiate a lower price with the vendor.
What does 'fixed price' mean?
If a property is marketed as 'fixed price', this suggests the customer will sell the property to the primary one that offers the selling price.
In practice, it's actually slightly more complicated. the vendor isn't legally obligated to sell to the primary person to supply the complete selling price. they'll also take under consideration other things, sort of a buyer's financial position, or their requested 'date of entry'. a primary-time buyer without a sequence, that's ready to move in quickly, is probably going to be far more appealing to a seller than someone who must sell their current home before they will move.
If you're unsure what proportion you ought to offer, ask your solicitor for advice. They'll be ready to provide support supported your personal financial situation.
How important is that the 'date of entry'?
The 'date of entry' is that the day that the cash is transferred to the vendor, and you'll be handed the keys to your new home.
How important this is often to having your offer accepted will depend upon the seller's personal situation. Some sellers are going to be keen to manoeuvre on a specific day - perhaps they're starting a replacement job, or they're a part of a sequence and wish to sell before they will purchase their next house.
If you are able to be flexible with the move date, ask the realtor about the seller's situation, and ask whether they're after anything especially. having the ability to compromise on the date of entry can cause you to a more attractive buyer and help your offer get accepted. We also have a Jargon buster to help you with some of the terms used by solicitors and estate agents .
If you are looking for an estate agent in Lanarkshire or the surrounding areas: Bellshill, Coatbridge, Airdrie, Motherwell then look no further than Lanarkshire Law Estate Agents - www.LanarkshireEstateAgents.co.uk or call us now on 01698 441222.
We also provide mortgage advice and information wiht one of our local mortgage brokers.