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How to buy a property in Scotland - part three
In the third and final part of our guide to buying a property in Scotland, we’ll walk you through the last steps you’ll need to take to finalise your purchase.
If you’re not yet caught up, you can head here to read part one first.
Putting in an offer
When you start thinking about putting in an offer on the property you want, the amount you decide upon will often depend on the survey results, amongst other factors. So, if you’ve decided to survey the property after you put an offer in, you should make an offer subject to survey – this means you’re free to alter your offer if the survey uncovers something that affects the value.
Otherwise, there are numerous factors to take into consideration when putting in an offer. You should consider what you can afford to pay, the level of competition from other buyers, the seller’s asking price and property prices in the local area when you come up with a figure.
Your solicitor will usually put in your offer via a letter to the seller. If you’re not the only person who has put an offer in, the solicitor of the seller will open all of the letters at the same time once the closing date has passed. If you’re successful, your solicitor should be contacted by phone and informed.
If your offer is rejected, speak to your solicitor about what the remaining options may be. Unless another bidder put in an offer that was accepted, you may decide to renegotiate with the seller – or you could walk away and look for a different property.
Hopefully, your offer will be accepted, and if it is you’ll be given a qualified acceptance by the seller’s solicitor. This simply means the property will be yours to own once all the details of the contract are worked out. From here, your solicitor should hand over the title deeds and planning papers – but nothing is set in stone at this point.
Finalising the contract
Both your solicitor and the seller’s will exchange letters known as conclusion of missives once the details of your contract have been agreed upon.
Once these letters have been exchanged, both you and the seller are legally bound to the sale. Sometimes, you might be asked to pay a fee to secure the deal. This is often called a holding deposit, which can cost anything from around £500 to £1,000. Although it’s more common to see penalties for backing out of the sale in the contract instead, it’s worth bearing this fee in mind.
The property will likely come with title burdens, which are responsibilities you agree to take on by owning the property. Your solicitor will check these over and discuss them with you, but they can range from simple things like where you’re allowed to leave the rubbish bins to restrictions on alterations to the property and how it’s used – like changing it from a residential premises to a business.
As soon as you’re happy with these restrictions, the seller will sign over the title deeds to you, which is known as the disposition.
Finalising your mortgage
Next, you’ll want to give your mortgage provider notice that the purchase has been agreed, along with the proposed date of entry. This is so they are made aware of when they’ll need to release the funds to the seller’s solicitor.
It’s worth bearing in mind that you’ll often be charged an arrangement fee when setting up your mortgage. Not all lenders charge one, but the fees can range from a £100 to £2,000. You’ll probably be able to add this to your mortgage, but remember you’ll have to pay interest on it so it will cost you less in the long-run to pay for it all upfront if you can.
Once the date of entry has arrived, and your offer has been accepted, the seller’s solicitor will get in touch with your mortgage provider to release the funds. If you’re paying for the property with cash and not taking out a mortgage, you’ll still have to pay the balance through your solicitor. During this stage, there may be a number of fees you’ll have to pay to complete the purchase.
Your mortgage provider could ask you for a money transfer fee, which is usually around £50, or a fee of between £100 and £300 for the upkeep of your mortgage account.
Your solicitor should show you the title deeds and get you to sign them, after which they are registered with the Land Register. This can cost upwards of £60, but the price will go up depending on how much you bought the property for.
It is usually at this point that you pay your solicitor for their services. The cost here is likely to vary quite dramatically depending on the number of properties you may have put an offer in for, but you can expect to pay between £400 and £900 – with the standard 20% VAT on top. If you didn’t pay for the searches when they took place, you’ll have these added to your bill too.
The final step is for your solicitor to pay the Lands and Buildings Transaction Tax, which is the replacement of Stamp Duty in Scotland. If your home cost more than £145,000, you’ll have to pay this charge within 30 days of your purchase being accepted. You should only have to pay the tax on the proportion of the total property value that falls within each band as listed in the table below:
|Property value||Percentage of tax to pay|
|£145,000 - £250,000||2%|
|£250,000.01 - £325,000||5%|
|£325,000.01 - £750,000||10%|
|£750,000.01 and above||12%|
Once all this is done you should be free to move into your new home! The seller will hand over the keys and you’ll be the new owner of the property.