The property market can be overwhelming, filled with jargon and complicated processes guaranteed to befuddle first-time buyers and seasoned veterans alike. Our detailed Property Buying Guide aims to demystify the industry to give you the tools to confidently find and purchase your next dream home (and even save some money, too).
In the latest instalment of our buying guide, we’ll look at submitting an offer for a home in Scotland. We’ll cover key points like how to submit a formal offer, what to include to give you the best chance of getting accepted and at what stage you can safely withdraw from the sale without incurring financial penalty. So, let’s dive in.
How Do I Submit an Offer?
In Scotland, a formal offer on a property must be submitted by a solicitor in writing to be considered. A verbal agreement or informal offer is not binding and won’t be enough to kickstart the legal process of purchasing a home you’re interested in. Once you’ve instructed your solicitor to submit an offer on your behalf, they will draft up the proposal to send to the vendor’s solicitor. An offer typically includes:
- The amount you’re offering to pay to purchase the property (if you’re unsure about how much to offer, speak to your solicitor – they will be able to advise you on how much similar properties in the area have recently sold for.)
- The date you’d like to move into the property
- Anything you’d like included in the sale (such as white goods, etc.)
- The standard conditions of the sale (such as ensuring the seller is entitled to sell the property, etc.)
- A time limit in which the seller must accept or decline the proposed offer
If the seller receives a lot of interest in their property, they may decide to set a Closing Date, a date and time in which all offers must be submitted to be considered. Closing Dates are designed to maximise the amount the seller can get as interested parties compete in a blind bidding system, leading many buyers to offer more than they originally intended to secure the property – including over and above the Home Report Valuation.
However, don’t be discouraged if a property you have your eye on goes to a Closing Date, as although a seller will generally be tempted by the highest offer, a number of factors will influence their decision. For example, a cash buyer with a lower offer that doesn’t rely on a mortgage or the sale of an existing property can be more attractive than a buyer offering more money yet stuck in a chain. For this reason, it’s a good idea to include a letter of explanation alongside your offer, detailing your ability to proceed with the sale promptly and any other considerations you believe will put you ahead of the competition.
Is An Offer Legally Binding?
When your solicitor submits an offer on your behalf, they will include several standard conditions that require the seller to provide information to proceed (such as proof of ownership). If the seller accepts your offer, their solicitor will issue a ‘qualified’ acceptance in response and may make amendments to your proposed offer (such as changing the entry date or what goods will be included in the sale). While this is happening, your solicitor may also be waiting for your mortgage provider to issue the loan to fund the purchase.
At this stage, no contract exists, meaning you’re not legally bound to buy the property and can pull out of the sale. Only once your solicitor is satisfied that all standard conditions have been met and both parties agree to the terms in the offer will you be ready to ‘Conclude the Missives’ and the contract comes into effect.
What Happens If the Seller or Buyer Pulls Out of the Sale?
Once the contract is in place, neither the buyer nor the seller can withdraw from the sale without incurring significant financial penalties.
If you, as the buyer, pull out of the purchase, the seller will expect you to pay for the cost of re-marketing the property, the difference between your offer and the one they subsequently accept (if it’s lower), and any money the seller has used to fund the purchase of a property they committed to on the strength of their sale with you.
If the seller pulls out of the sale once the contract is in place, you can take them to court to force the deal through and receive compensation to cover your expenses and any inconvenience caused.
If in doubt, it’s best to speak to your solicitor, who can advise you on your rights each step of the way and help you avoid any legal mishaps.