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WICK
22 Bridge Street
Wick KW1 4NG
T: 01955 602222
F: 01955 603016

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19 Traill Street
Thurso
KW14 8EG
T: 01847 892225
F: 01847 892235

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Tain
IV19 1AE
T: 01862 892555
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Homebuying Info

What you need to know about buying your home in Scotland
Buying a home is unlike almost any other purchase you will make. Instead of expecting your home to depreciate in value like a car or a washing machine you expect it to increase in value, but unlike any normal investment, such as a savings account, an insurance policy, or stocks and shares, you expect to have the everyday use of your ''money'' in the form of the house or flat you are living in.

Buying property is also more complicated than most of the other purchases you will make. You will probably be committing yourself to a loan for anything from 15 to 25 years, to constant insurance premiums, maintenance costs, and of course all the ''optional extras'' such as furnishings, decoration, etc.

It is vital, therefore, that you seek and obtain the right sort of advice as early as possible - as soon as you start thinking about buying a home, whether it is your first or intended to be your last.

We can give you the unbiased advice and help you need - at less cost than you probably expect.
Your Finances
Making an Offer
The Price
The Entry Date
Moveables
Transfer of TItle
Conditions of Title
Planning, Environmental Health, etc.
Acceptance of your Offer
A Verbal or Informational Offer can be a binding contract
Payments to Accounts and Bridging Loans
After you get the Keys
Disclaimer: The information on these pages is necessarily general and commonsense dictates that you should take legal or other advice before acting upon it. No solicitor/client relationship is created by the reading of the pages.
Your Finances
In order to buy a home you must first have the money or be able to borrow the money to pay the Price.

In virtually all cases you will require to find a proportion of the cost yourself. (This proportion is frequently referred to as "the Deposit''). In most cases it will come either from your own savings or from the sale proceeds of a previous home.

In some circumstances, however, it may be money borrowed from a member of your family or a friend.

Where you are borrowing from a relative or friend it is important that both the lender and yourself know exactly how much money is being offered on loan and on what terms. There is nothing like money for causing family bitterness and lost friends.

With most purchases you will be borrowing much of the price from a Building Society, Bank or Insurance Company. The loan will be ''secured" over the property and is called a "Mortgage'' or , more properly, in Scotland, a "secured loan".

Where you are dependent on a mortgage, the Building Society or Bank etc., may arrange for the property to be valued. The cost of this is your responsibility, but while a valuation may be half the cost of having your own survey done, remember it does not give you the same safeguards.

Many people cannot afford a private survey every time they see a property they like so it is worthwhile contacting your Solicitor, who can discuss with you where a private survey is advisable and how you can avoid the full double cost of a private survey and the lending institution's valuation.

You will of course require a valuation for your mortgage even with a new property and a private survey may be of assistance in relation to the future investment potential of the property and any aspects of the building which are of immediate importance.
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Making an Offer
Once you have decided that you would like to buy a particular property you will have to make a formal offer in writing.

If your offer is accepted it is a binding contract under Scots Law and you may not have an opportunity for second thoughts.

It is therefore vital that you seek Professional advice to ensure that you will have enough money to go through with the purchase and that all the necessary conditions governing the contract are included.

With a new property, you will normally be presented with a pre-printed Form of Offer. You should never sign until you have gone over the conditions with your solicitor and are satisfied that the formal contract reflects your understanding of the agreement with the builder and that the necessary finance is available to pay the price. Most offers follow a similar format, but remember that these are designed to deal with all the sales of a particular development and not your specific transaction. Accordingly, if you are agreeing variations on the basic plan, any extra features, or the like, you will wish to ensure that your contractual rights are contained in the contract.

In addition to any special conditions relating to your transaction, the conditions of offers relating to house purchase in Scotland are likely to include clauses relating to the following:
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The price
Most properties are advertised in Scotland at "offers over" a certain figure. This usually implies that the seller expects to receive a sum in excess of the asking price. The actual price you will have to pay may be considerably higher than the start price and your solicitor can often be of assistance in providing guidance as to the actual price you may have to offer.

Some properties, in particular new houses, are sold at a "fixed price". You should always remember that simply because a property is advertised at a ''fixed price" it does not mean that a valuation by a surveyor will be as high as that price.

Where the property is being sold without a fixed price you will have to decide the price that you wish to offer. The following may be of assistance:

Before you come to make an offer you will probably have looked at a number of properties and you will have an idea of what you would be prepared to offer were money no object. You can therefore decide a price at which you would say to yourself "If I don't get it for that I don't want it''.

You can also calculate how much you can actually afford. The formula is: Take the maximum amount of mortgage you are being offered in respect of the particular property and add your savings and any family loan or other money available. (if you have a property to sell your Solicitor will be able to advise you as to what amount you are likely to have available from the sale after expenses, etc.). From the total, deduct the amount of money you will require for removal costs, furnishings, etc. and the expenses of the purchase transaction. Your solicitor can advise on this. The sum remaining after these calculations is the maximum amount you can afford.

If you have done the above calculations you now have two prices: 1. Money no object; and 2. What you can afford. The lower of these two figures is the most you should offer for the property as being "your best offer".

In some cases you may decide, or be advised to offer something less than your best offer, but remember that you may not get a second chance. At least with your best offer there need not be any tears if your offer is not successful. After all, if you were not prepared (or able) to pay any more you will not say to yourself -"Perhaps if I had offered a few hundred more . . ."
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The entry date
The entry date is the date when you wish to get the keys and occupation of the property.

It is also the date when the price is payable in full. To a seller, the date when he or she expects to get the price can be as important as the actual amount of money, so you should try to find out from the seller what his or her wishes are and try to come as close to these as possible.

With a new property, the date of entry may not be known at the time of your offer. Instead the date will generally be linked to the date of completion. It is vital that the contract accurately reflects the position since it might otherwise be that the Builder claims the property is complete, while the lender claims it is not and refuses to part with the loan until additional work is carried out. In addition the Local Authority will themselves determine when the property is ''habitable''.
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Moveables
Frequently a seller is prepared or wishes to leave moveable items with the property being sold.

The law defining ''moveables'' is complex, but a rough rule of thumb is that where an item is screwed to the wall etc. of the property it is presumed to be part of the property itself, e.g. door handles, fitted fire surrounds etc.

Moveables are most commonly carpets, curtains and pieces of furniture or household equipment (e.g. a cooker).

It is desirable to avoid any misunderstandings and you should therefore try to establish exactly what the seller is prepared to leave and what he or she intends to remove. It is all too easy to believe that the seller is leaving a beautiful fitted carpet in the master bedroom only to find on getting the keys that the seller has, in fact, left the threadbare carpet in the second bedroom.

Sometimes a builder will offer -white goods'' or carpets with a new house and it may be important to specify exactly what you are entitled to expect and what guarantees (if any) are available for equipment, etc.

It may be possible in some cases to divide the price being paid between the property and the moveable items, thereby saving in some cases, Stamp Duty or at least part of the Stamp Duty.

But, remember that it is not only illegal to misrepresent the price of the house, but also the amount of your mortgage may depend on how much you are paying for the property and by apportioning the price between the property and moveables you may inadvertently reduce the amount of your mortgage.
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Transfer of Title
It is important that the seller grants a valid Title in your favour to the property, so that you know that no one will contest your Title and that you will be able to sell the property without incurring additional legal fees for sorting our any defect.

A valid Title is also essential in order to obtain your mortgage and the loan cheque cannot be cashed by your solicitor until there is a valid Title in your name.

The Deed transferring the Title is only granted in exchange for the full price and so it follows that you cannot use your mortgage funds to finance a payment to account to get entry to your new home.
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Conditions of Title
Land, houses etc. in Scotland are usually sold subject to conditions. These may require the owner to do something (e.g. put up a fence) or not to do something (e.g. not to carry on any business activity from a residential property). They may also specify continuing obligations re maintenance or insurance.

With new properties, the builder may be imposing a new set of conditions dealing either with your specific property or the whole development.

In all cases you want to know if there will be any unusual conditions or continuing obligations which will involve you in future expense.
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Planning, Environmental Health, etc.
Properties may be affected by planning proposals or requirements of Statutory Bodies such as the Local Authority. New properties will be subject to the conditions on which planning permission was granted and the Building Control Regulations. The basic rule is that the purchaser is responsible for satisfying him or herself that the enjoyment of the property will not be adversely affected by any such proposals, requirements, conditions or regulations.

So it is up to you to check the position or have your solicitor check it out for you.

The formal offer can, however, make it a condition of the contract that the seller inform you before completing a binding contract of any formal Statutory Notices intimated to him or her prior to the acceptance of your offer.
The loveliest dream cottage can be turned into a nightmare by plans to build a motorway outside the front door.

Maintenance, Repairs, etc.
With ''second-hand'' or older properties it is advisable to ensure by contract that the seller will be responsible for any outstanding charges for repairs or maintenance affecting the property carried out or instructed prior to the date of entry.

Where major works have been carried out with Local Authority Grant Aid, special provisions may be required in order to ensure that the grant will be available when the bills are rendered. After all you do not want to be surprised by a demand for payment for last year's re-roofing.
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Acceptance of your offer
Your Offer, unless it states otherwise, may be accepted at any time. It is normal therefore to include a time limit for acceptance.

The actual time limit will depend on the individual circumstances of each case, e.g. whether or not the seller has fixed a date and time by which your offer must be lodged to ensure that it will be considered (generally referred to as a "closing date''). Your solicitor will be able to advise you on this.
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A verbal or informal offer can be a binding contract
Avoid handshaking until you have seen your Solicitor. Be very careful of making verbal or informal agreements about the purchase of a home. Apart from any other misunderstanding the sum you mention may be used to push up the offer of another interested party.
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Payments to Account and Bridging Loans
At settlement of the purchase the price is exchanged for the Title and possession of the property. There may be circumstances, however, where you want to take entry to the property but do not have the full price available. In such cases it may be necessary to arrange either a "payment to account'' of the price or a ''bridging loan''.

Payments to Account: Since, under Scots Law, there is a binding contract between the purchaser and the seller, the seller may let the purchaser take entry in exchange for a payment to account of the full price.

The size of the payment to account is subject to negotiation and (because you get the full use of the property but the seller only gets part of the price) interest on the outstanding balance is usually payable to the seller. The rate of interest will depend on the circumstances in each case. This facility is not usually available in connection with a purchase from a builder or developer.

Bridging Loans: There may be circumstances where the seller refuses to let you have entry without payment of the price in full. It may then be necessary for you to obtain a -Bridging Loan'' from a Bank.

A Bridging Loan is basically an overdraft, but is generally only obtainable where the Bank know roughly how long it will be needed and where the money to repay it is coming from -a house sale or mortgage. Interest is normally at overdraft rates.

In most cases the interest payable in terms of any payment to account or bridging loan is eligible for Income Tax relief on a similar basis as a mortgage.
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After you get the Keys
Whether you are buying a new property or an older one, you should check the property as quickly as possible. If there are any unexpected problems you should contact your solicitor as soon as possible. Where equipment is included in the sale and the seller has warranted that this is in working order, remember to check by turning the equipment on.

With new properties you will probably begin to notice minor defects appearing over a period of time, e.g. cracking of plaster work, shrinkage of door or window frames. This is perfectly normal, but you should notify the site agent or builder as soon as you spot a problem. These types of minor defects are usually referred to as "snagging''.

A reputable builder will arrange for repairs to be carried out, but it will not always be convenient or economic for this to be done immediately. The builder will wish to wait a reasonable period of time to ensure that all such problems have materialised and then arrange for them all to be dealt with at the one time.
However, you should keep a note of all the defects that you have reported and, if you feel that there has been unreasonable delay, contact the solicitor who acted for you for assistance.
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