Buying houses in Scotland - discuss

I've been having discussions with friends about the differences between buying in Scotland and buying in England. One was always led to believe that in Scotland it was much simpler as there was no chance of being gazumped. In fact many people seem to think a verbal agreement to buy/sell is binding but I think not. However if an offer is made and accepted in writing, even though still subject to contract, is this binding or can one party still back out for no good reason, i.e. changed mind? If it's not binding, what's the difference between Scotland and England? :confused

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Originally Posted by badger

I've been having discussions with friends about the differences between buying in Scotland and buying in England. One was always led to believe that in Scotland it was much simpler as there was no chance of being gazumped. In fact many people seem to think a verbal agreement to buy/sell is binding but I think not. However if an offer is made and accepted in writing, even though still subject to contract, is this binding or can one party still back out for no good reason, i.e. changed mind? If it's not binding, what's the difference between Scotland and England? :confused

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The major difference is that in England offers are up to the asking price and in Scotland its offers over the asking price. Have to admit England have a better system with their way. A verbal offer as far as I am aware is legally binding so when viewing stay cool and say as little as possible. I also take issue with the closed bids idea as you never know if you have been successful until the last day.

It would appear not to be binding - my sister was selling a house in Aberdeen and got offered a very good price for it - well above asking price, the couple phoned on the Friday asking if they could also buy their furniture, then on the Monday the solicitors phoned to say the couple had 'changed their minds' ................... wait for it, However, they were willing to go ahead with the sale at a lower price. :confused

They had already had all surveys etc done prior to their initial offer, but it is seemingly common practice down there to offer silly money and change the offer once it has been agreed - seller either has to settle for lesser amount or put house back on market - making people sceptical of the property as there 'had to be something wrong with it' by the time the first sale fell through :confused

Things you say when buying and selling can form part of the contract in Scotland, but the way offers are written now they are often subject to survey anyway. This gives the buyer the option to back out at an early stage. Once the deal is at the missives stage, it is binding on all parties. The missives can be completed weeks before the final exchange of the house.
In England the contract is still open up until the exchange of contracts which only occurs 3-5 days before the house is handed over. With the exchange of contracts a deposit of around 10% is paid. Even then you can still back out but you will forfeit your deposit. Once the contracts are exchanged, even though you don't physically have the house, you are responsible to insure it.

difference in England is you can end up in a big chain of buyers & then if one person in the chain has a problem all the buyers suffer!
My parents lost a house sale due to this, all set to move then a week before moving day the whole thing fell through[evil]
Scotland has a much safer way of doing things.
Ive never had to pay a deposit with an exchange of contract either maybe thats just in some areas.

Don't agree with you Tristan on the gap between exchange and completion in England, where I have far more experience of buying and selling than I have in Scotland. The usual period is about 4 weeks, since it is unusual to back out after exchange and this gives everyone time to arrange removals etc. I was quite surprised when I bought up here that you could offer not just subject to contract, but to survey, sale of your own house etc. which is very similar to England.

mccaugm - as I said earlier, many people think an offer is verbally binding but if you look at solicitors' websites you'll see they are adamant that it's not. Came as a surprise to me too.

I don't see so many houses going to closing bids these days although you'd think from one agent's website that this was normal.

On the selling side, if you accept an offer in writing but subject to contract - can you still back out?

I've worked in the property business most of my life in England so know how things work there but can't figure it out up here - just curious.

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Originally Posted by badger

Don't agree with you Tristan on the gap between exchange and completion in England, where I have far more experience of buying and selling than I have in Scotland. The usual period is about 4 weeks, since it is unusual to back out after exchange and this gives everyone time to arrange removals etc.

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I will have to take note of that. We were told (and it turned out to be) around 7 days. Having it earlier would have saved a lot of worrying.

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Originally Posted by badger

On the selling side, if you accept an offer in writing but subject to contract - can you still back out?

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There appears to be a bit of back and forth between seller and buyer, removing clauses, agreeing on fixtures and fittings and adjusting dates. In theory until the missives are concluded either party could back out but I think they look for a good reason (ie survey problems) if you are going to do so. After the missives have been concluded you are in a binding contract.

agree with tristan ive always exchanged contracts the week before moving.
my parents moved last week & exchanged two days before!!

Closing dates are typically a nightmare for a buyer, whilst for the seller (and the agent) it can lead to higher than expected price. Go canny as a rising market and comments 'from the trade' can push you to over-extend yourself. At the end of the day with a closing date you have to view it objectively - check what other properties of a similar nature in the same geographical area have been selling for recently (I think nethouseprice.com or similar is useful for this), offer what you can afford/believe the property is worth/can live with and finding a good adviser and surveyer are also worth their weight in gold. The problem with this dispassionate view is that this single biggest purchase in your life is more likley to be driven through need and by the heart.......

It helps anywhere, but in England it really helps if you are in a strong position to buy with no downwards chain on your end.
The house we eventually bought was offered to someone else, but the sellers felt we were in a better position to buy so we got first refusal - a roller-coaster of emotions but we got there in the end.
What I liked about the Canadian system is that it is all done and dusted within a few days of the offer - Offer subject to survey with a deposit and within a few days of the offer (assuming all is well) both sides are in a binding contact. That is what initially threw Ms T and I with the Scottish system: We kept waiting for the deal to be binding and although everything was fine it took weeks, rather than the days we were used to, to get to the missives.

Yes it's always good to be in a position to complete - chains are a nightmare (been in a few!). I have known quick exchange and completion, it's perfectly possible, but I usually found English solicitors didn't like it and if you wanted it for any reason you really had nag them. It's very confusing moving from one country to another.

Like your signature, Tristan :)

THe only problem I have with the system in Scotland is the Vendor should pay for a survey and make it available to all who express or register interest. There could be several surveys done all paid for by interested buyers all but one to no avail. Fine for surveyors but expensive and needless for buyers.

It's a racket.

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Originally Posted by percy toboggan

THe only problem I have with the system in Scotland is the Vendor should pay for a survey and make it available to all who express or register interest. There could be several surveys done all paid for by interested buyers all but one to no avail. Fine for surveyors but expensive and needless for buyers.

It's a racket.

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Have to agree with you on that one - I know when I bought my house, the mortgage company insisted on it being a specific surveyor - who carried out all the surveys - I paid for a full survey which could've been given to all interested parties without expensive fees, but instead of 1 fee for surveys, the surveyors got 5+ (not bad for a couple of hours work). I then overheard someone in a shop saying they'd never bid on a house again because it cost them so much with nothing to show for it :(

I'm lucky my parents went to solicitors for me to finalise my offer (I was ill on the day) because the solicitor told them my offer was too high - if I'd gone I'd have taken the advice and lowered my offer. Since then I found out the next offer was less than £1k lower.

A few (perhaps all) will only survey the house once. The reason we were given if they find something else they are obligated to tell the previous people. So if they went for a basic survey and you went for a more rigorous one, they would have to pass on the information to the other party.
You can get a copy of the original survey but it costs almost as much as getting a complete survey done and it may not be on "the correct form" for the mortgage company.
Some mortgage companies will only pay for or want a valuation survey. If you go for a homebuyers survey or a structural survey (which includes the valuation) they may not accept it so you have to pay for two surveys.[evil]

There are some useful notes on the Georgeson's Solicitors web site.
See http://www.georgesons.co.uk/

I've been looking at their website and Macphersons, which is why I'm still confused.

Macphersons say

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You should note that verbal offers have no contractual effect in Scotland and the offer must be in writing.

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Georgesons say

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Formerly all offers had to be made in writing as a handshake had no legal significance in Scotland, however, this is no longer the case.

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which seems to suggest that a handshake now makes it legal ?

I thought a handshake used to be a binding contract but is no longer; Georgesons seem to be suggesting the reverse. :confused

This link does not answer your question per say but it does reflect my experiences:
http://ipsola.com/article,168,Scotla...y_Buying_Guide
http://www.hastingslegal.co.uk/Legal...es/buying.html

"While a "verbal offer" is not binding in Scotland once the seller's hopes have been built up it may be difficult to renegotiate the price to a more realistic level." FROM http://www.hastingslegal.co.uk/Resou...ng%20Game.html
and
http://www.southforrest.co.uk/movingtoscotland.html
It appears a verbal offer is not binding. That is not to say what is discussed will not be reflected in the missives, and could offer an easy way out.

The Offer and Contract - "missives"
If the sellers agent is not fixing a closing date the parties are free to negotiate on the offer. After discussing the offer with you our negotiations on your behalf with the seller's solicitor or estate agent can proceed, verbally or in writing. A verbal offer is not binding but in some cases the negotiations will be carried out verbally with the written offer only being submitted once agreement on price is reached.

In most cases where a written offer is to be accepted the acceptance will contain some further conditions ( this is referred to as a qualified acceptance). If these qualifications are acceptable a letter accepting them is issued and the bargain will be concluded at that stage and is then binding on both parties. Only once the point has been reached where neither party has any further qualifications and the last set of qualifications has been accepted is there a binding contract - up to that point either party can withdraw without penalty.

The letters forming the contract are also referred to as the missives. Until recently a valid offer for property had to be in writing and signed in accordance with various legal requirements. Now, any signed letter can form the basis of the contract . You should therefore take care not to commit any discussions in writing to either the seller or selling agents as that could end up being accepted and forming part of the contract.
FROM http://66.102.9.104/search?q=cache:w...n&ct=clnk&cd=8