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Although Scotland is part of the UK, it has its own legal system and the law governing the ownership of land and property is quite different from that operating elsewhere in the UK.
This is also reflected in the system of homebuying in Scotland. Almost all property in Scotland is sold on the basis that the buyer is given the right to occupy and use the premises. The English concepts of freehold and long leases do not apply. In England the basic system is that the person buying the property will reach a 'gentleman's agreement' with the seller as to the price. After that the buyer will try to get the mortgage and the solicitors for each party will become involved in checking the title and preparing the formal contract documents, which are exchanged once the parties are satisfied that all the conditions will be met. Until the parties exchange contracts, either the seller or the buyer may withdraw from the agreement without penalty and it is impossible to set a formal removal date. The average time from reaching the gentleman's agreement to the date when keys are handed over is about 12 to 16 weeks, but this can vary considerably. In Scotland the system is much more rigid. The seller and buyer enter into a formal contract known as 'missives' right at the beginning of the transaction. The buyer makes the seller an offer on the property and it is either accepted or rejected. If it is accepted and the buyer breaks the terms of the contract, he or she will almost certainly be liable for damages to the seller, which can result in claims for many thousands of pounds. It is therefore essential when you make a formal offer that you have sound legal advice and the finances to pay the purchase price. This means that you must have a lender lined up who is not only prepared to provide you with a mortgage, but is also prepared to lend you a mortgage of the amount needed to buy the property you are interested in. You must also make sure that you will have available the part of the price and expenses that you will be meeting yourself. So, in Scotland, it is generally necessary to have arranged your mortgage, including a valuation of the property, before you make your offer. The downside of this is that you have to pay for the valuation even if you decide not to go ahead with an offer or your offer is not accepted by the seller. On the other hand, the valuation means you have vital information about the mortgage value of the property, its condition, and the likely cost of any important or urgent repairs before you decide to put in a formal offer. If you are selling another property in Scotland you can, once you have concluded missives for the sale, normally rely on the money from the sale becoming available at the date stated on that contract. If, however, you are moving from England it is not advisable to rely on any anticipated sale proceeds until contracts have been exchanged. This is because the buyer in England may withdraw from the agreement at any time without having to pay you damages. In Scotland many properties for sale invite offers over a particular price. This is the price that the seller, after consulting his agents, believes will attract potential purchasers and indicates a level below which it is not normally really worth submitting a formal offer. The actual price which may have to be paid can, in some cases, be higher than the asking price by 10 or even 20 per cent and, in some exceptional cases, by more. This differs markedly from the position in England where properties are generally marketed at a start price and the seller expects to agree a lower price at the end of the day. In Scotland when more than one person wants to make an offer for a particular property it is usual for the seller to fix a closing date for offers. The closing date is a precise time on a particular day by which your formal offer must be in the hands of the selling agent if it is to be considered. No one knows what the other offers may be but you are, of course, aware that there is competition for the property, that everyone relying on a mortgage will at least have received a valuation report, and you will know how much you are prepared to offer. It is worth remembering that the seller is under no obligation to accept the highest, or indeed, any offer submitted by the closing date. In addition to the price and date of entry, the formal offer should contain a large number of contractual conditions to protect your legal and other interests. As well as looking at the price being offered, the seller will also be interested in all the conditions of the contract when deciding which offer to accept.
A big advantage of the Scottish system is that it avoids the difficulties of delays resulting from 'chains'. These can arise in England and Wales where, if one sale is delayed, a whole series of transactions can be similarly affected. Once missives have been concluded in Scotland, you will know that you have a binding contract and that you cannot be gazumped. You will also have an agreed date of entry. This will normally reflect the wishes of both the seller and purchaser and is generally four to five weeks after the successful offer has been completed.
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