If you're new to the Scottish property market, you might have some idea that it operates rather differently from elsewhere in the United Kingdom. However, interpreting the terminology can be confusing, particularly if you haven't yet appointed a solicitor. Here is a list of some of the most common terms, with corresponding explanations, to get you moving in the right direction. The list is alphabetical and is not intended to be a step-by-step guide through a typical transaction.
1. Closing date
In Scottish property sales, the seller may choose a date (with the help of their estate agent and solicitor) by which all interested parties must submit their offers for the property. Not all sellers stipulate a closing date. A seller is most likely to decide to fix one if they know that a number of prospective buyers are interested in the property. Conversely, if only one would-be purchaser has expressed an interest (and sellers know who is interested because of an obligation earlier in the process requiring interested parties to "note their interest" in the property), the seller may choose instead to try and negotiate an acceptable sale price, which - of course - might be based partly on subjective factors as well as on recent sold property prices.
2. Home Report
Unlike England, where a seller generally only has an obligation to provide prospective buyers with an EPC and purchasers conduct their own surveys, Scottish sellers must provide a three-part Home Report. Part 1 is the Single Survey, which is a qualified surveyor's assessment of the property's condition and value, plus an accessibility audit for individuals with additional needs. Part 2 is the surveyor's assessment of the property's energy efficiency. Part 3 is the Property Questionnaire, in which the seller provides relevant information about their property, such as its council tax band, details of any alterations made to the home, any car parking facilities, and details of any extra costs (service charges etc.). Some properties are exempt from the requirement to provide a Home Report. These include new builds up for sale for the first time, homes bought through right to buy, and properties that also have a commercial use (such as a flat with a shop beneath it). The seller's solicitor or estate agent is usually responsible for compiling the Home Report. A prospective buyer who requests a Home Report must receive it within nine days of asking. Home Reports do not "expire", although the information contained in one must not be more than 12 weeks old when the property goes up for sale. Buyers can request a new Home Report if they feel that the information in the current one is out of date, but the seller has no obligation either to comply with the request or to pay for the compilation of a new report.
3. Land and Buildings Transaction Tax
Broadly comparable to the Stamp Duty Land Tax (SDLT) that applies in England and the Welsh Land Transaction Tax, the Land and Buildings Transaction Tax (LBTT) is payable to Revenue Scotland upon purchase of a property. Although the thresholds differ, LBTT is calculated on a percentage basis in the same way as SDLT. Again, as with SDLT, anyone buying a property that is not a replacement for their main home faces an Additional Dwelling Supplement. First-time buyers in Scotland benefit from exemption from the LBTT provided they buy a property that is worth £175,000 or less. Where LBTT is payable, the purchaser's solicitor usually organises the mechanics of the payment. Anyone who fails to make payment within 30 days of the sale is subject to a penalty on top of paying the outstanding amount.
This is the series of letters that constitute the contract between a buyer and a seller. They begin with the buyer's offer to purchase the property. This is usually followed by a "Qualified Acceptance", in which the seller accepts the offer subject to additional conditions. Further Qualified Acceptances may then ensue as the parties iron out details of the transaction. The last letter in the series is the "Concluding Missive", which records all the previous Qualified Acceptances as "accepted" and the Missives as "concluded". Once Missives are concluded, the sale is binding on both parties. The length of time taken to complete Missives depends on a number of factors, including the state of the market, the efficiency of the seller, the buyer and their representatives, and the length of time it takes to receive an Offer of Loan (where needed) from the buyer's mortgage lender. As a general rule, Missives take an average of six weeks to conclude.
5. Noting interest
This is a verbal assurance that someone is interested in buying a particular property. It is given by the potential buyer's solicitor to the seller's agent. Notes of interest are not legally binding, but they do provide interested buyers with a certain level of reassurance that they will subsequently receive the chance to put in an offer. That said, although there is nothing to stop would-be buyers from trying to place a note of interest, most sellers' agents will stipulate that notes of interest must come from buyers' solicitors. From a buyer's perspective, noting interest through a solicitor means that they already have a legal advisor in place to help them pitch any subsequent offer.
6. Offers over
Although not entirely unknown elsewhere in the United Kingdom, "Offers over" is most common in Scotland. It's an indication that the listed price is intended only as a guide to help buyers pitch an offer. Novice buyers can spend considerable time debating how far above the quoted price they need to pitch an offer. Fortunately, Scottish property solicitors are generally very skilful at advising their clients on how much to offer. Much depends on the current state of the market and, in particular, recent sold property prices, how long it takes for the average home to go under offer, and whether it is generally regarded as a buyers' or a sellers' market.
This marks the completion of the transaction, when funds transfer between buyer and seller, and the buyer receives possession of the property's keys and title deeds.
You can sign up to our newsletter and join Nethouseprice’s community of over 190,000 members who get regular property tips, relevant offers and news, click here http://nethouseprices.com/auth/user-register