7 Step Guide to Purchasing your First Home in Scotland – A Glasgow Property Solicitors’ Guide
Step 1 – Pre–Offer
You have finally decided to take that leap and start looking for your first home in Scotland so what should you do first? Well the first thing to do is instruct a local conveyancing solicitor (also known as a ‘property solicitor’ or ‘property lawyer’ – the terms are interchangeable in Scotland). You will want to obtain quotes from various solicitors before appointing the right one but please be aware the cheapest quote will not always mean the best service. Some high volume property firms will almost always have hidden fees so what might look like a good deal may turn out more expensive further down the line. At The Glasgow Law Practice we offer competitive quotes with no hidden extras.
Step 2 – Offer
You have fallen in love with a property so what should you do now? First step is contact your property solicitor to Note Interest. A Note of Interest is a formal notification to the estate agent that you are considering offering on the property and want to be kept updated on any changes to the status of the property i.e. a Closing Date. So what is a Closing Date? Where a property has more than one Note of Interest the seller may decide to set a closing date. A closing date is a nominated date and time when all interested parties should have their solicitors submit their offer in writing so that the seller can review all of the offers and make a decision. Not all properties go to a closing date and we may be successful in negotiating a price with the sellers without competing with anyone else. It makes sense to contact one of our expert conveyancing solicitors at The Glasgow Law Practice at the earliest opportunity once you have seen a property.
Step 3 – ID and Money Laundering Checks
Your offer has been accepted - Congratulations! So what do you need to do next? Following what is normally verbal confirmation that your offer has been accepted, you will receive a copy of your written offer, our terms of business and a request for your identification documents and bank/financial statements. It is a Law Society requirement that we verify all our clients so you can simply pop into our office with your ID or you can complete this remotely using a platform called Amiqus. We will also require it least 3 months bank statements for the account which holds your deposit. Our Client Guide to our Source of Funds Policy can be looked at for further information.
Please note at this stage you will be completing a similar process with your financial advisor so that they can submit your mortgage application.
Step 4 – Missives
In Scotland the contract between the seller and purchase is referred to as the Missives. The missives are essentially formal letters exchanged between each party’s solicitors starting with our Formal Offer. The Missives will cover the conditions of sale such as the purchase price, date of entry and various other matters. The Missives are issued in accordance with the Scottish Standard Clauses. A Client Guide to the Scottish Standard Clauses is available from our website.
Following the acceptance of your Offer your solicitor will within a short time receive from the seller’s solicitor what is called a Qualified Acceptance of our offer. At this stage, the seller’s solicitor while accepting our offer seeks to amend our it to reflect the circumstances of the sale and this letter will usually be sent to us along with a copy of the title and associated reports for the property. It is this stage that your solicitor will complete their conveyancing checks. Your solicitor may receive these documents as soon as a couple of days after your offer has been accepted or it could be several weeks. This timescale is all dependent on the seller’s solicitor.
Step 5 – Conclusion of the Missives
Prior to concluding the missives your solicitor will have checked the contents of the Qualified Acceptance against the Home Report as well as the property searches namely the Legal Report, Property Enquiry Certificate and Coal Report. Your solicitor will also have reviewed the title for the property and you will have been provided a copy of this. If there have been any alterations carried out to the property then your solicitor will have requested the relevant paperwork and discussed this with you.
Once the above points have been confirmed, your solicitor is in a position to conclude the missives which means that you will be in a legally binding contract to purchase the property on a specific date. It is essential therefore that your finances are in place at this stage particularly your mortgage offer. Your solicitor will not conclude your contract until you have a mortgage offer in place and without confirming to you that this is about to be done on your behalf. Similarly if you are using the First Home Fund for example, your solicitor will not conclude your contract until you have been approved for this scheme.
Please note the missives are not signed by you personally and are done on your behalf by your solicitor.
Step 6 – Financial Preparations
Your missives are concluded and if you are obtaining a mortgage over the property, your mortgage offer is in place, what then are the final steps leading up to you getting the keys for your new home? Well firstly your solicitor will prepare your mortgage documentation namely your Standard Security. The standard security is the document which gives your mortgage lender security over your property and allows them to repossess the property if you fail to keep up with the repayments of your mortgage. Similar documentation will be signed at this stage if you are participating in a shared equity scheme, like the First Home Fund.
Your solicitor will also send you a breakdown of the funds due and payable at the point of completion in a cash account. The cash account will confirm the amount we expect to receive from your lender, the payments anticipated to go out (purchase price, LBTT (Stamp Duty) and legal fees, etc) and the final balance payable by you. We require payment of your funds no later than one day prior to settlement. Once you have completed your transfer you will be required to provide your solicitor a transfer receipt namely a bank statement or screenshot showing the transfer. Again, refer to our guidance regarding source of funds to ensure you have provided us with all of the information about where the money you are paying to us has come from.
Stage 7 – Settlement Day (Key Release)
Congratulations you have arrived at settlement day, which is the day you will finally collect the keys to your own home. So what happens on the day? Presuming the missives are already concluded, the selling solicitors will exhibit their final paperwork and we arrange the transfer of the purchase price to their account. Timescales for this transfer are dependent on how quickly we receive your loan funds from your lender. Once the money has been received by the sellers solicitor, they will contact the estate agents and tell them to make the keys available for your collection and we will call you to confirm.
Your home purchase journey has completed. All you need to do now is settle in and start paying for it!