Buying a House in Scotland before selling my existing house

Romano10

Hi Everyone

I'm hoping someone will be able to help me with this as my brain hurts from thinking about it.

After paying off my mortgage last year I own my own house outright. I have someone who seems quite interested in buying it but I am currently having some rewiring done and a new kitchen put in so they won't consider an offer until the work is completed (in about a month). The house is valued at around £180K.

The problem is I want to move to Scotland and have seen 2 properties I am really interested in but I've been told I can't even place an offer on another property until my house sale is completed.

I'm concerned about this as I don't like the idea of selling my house and being homeless and then finding out that the properties I'm interested in are either gone already or the seller is looking for much higher than the asking price which I couldn't afford.

The ideal for me would be to buy a new house whilst my house sale is going through so I can move straight into the new house. But I retired due to sickness last year and am in receipt of DLA and incapacity benefit as my only income, altho I also have £50K in savings and obviously own my own home. A mortgage in the new house I've calculated would cost between £500-600 a month and I think I could afford this as well as the ongoing bills on my existing home for however long I needed to, but I just don't know what to do for the best and am not sure anyone would give me a mortgage because of my being on benefits.

I was wondering if anyone else had been in this situation and managed to find a solution or if there's one staring me in the face and I'm just too dense to see it.

I know I could wait and sell my house, rent and then look to buy one of the other houses I want, but I'm concerned they will be gone and they don't come up that often. I also have 4 dogs and have trouble finding places to rent and am sick so the hassle of moving multiple times is really getting me down.

Any ideas much appreciated.

Bunny

dopester

I don't fully know how it works.. but in Scotland rules are different.

Something to do with "missives"... once you make an offer and it is accepted with the missives signed.... you are legally bound to buy the place.

So many stories here in the past of people not being able to sell their existing homes at the price they expected to get... and now legally stuck in having to buy another home... pulling their hair out with regret.

Someone else can explain it better than I.

missile

There is no reason why you cannot buy before you sell. I would suggest that is what most people do.

Obviously the problem may be funding the purchase of your new home. The easiest way would be to use your £50K deposit and get a mortgage / bridging loan to cover the balance. Alternatively you could raise a mortgage on your old property. As and when you sell, you will be able to pay off the mortgage.

Main difference in Scotland, is that once a bid is accepted it is binding on both parties. No gazumping or worrying about chains failing. In your situation, be careful as you cannot back out, like you can in England.

missile

PS: It matters not a jot where your income comes from, if you can show that your income is secure and sufficient to meet the lenders criteria.

I would suggest you contact an independent mortgage broker. Most give good advise free of charge. :T

Frugaldom

Hi, I live in Scotland and was trying to buy a property just recently. (Got outbid.) Up here is completely different from England, as you must provide evidence that you have the funds in place to pay for the house BEFORE you can make a legal offer, which is done via a solicitor. (Solicitors' offices can also be property agents up here - see www.sspc.co.uk for examples.) You must also provide evidence of the source of your funds.

Missives are not concluded until all funds to pay for the house, fees, legal costs etc have been paid. If you already own a house outright and plan on selling it to move to Scotland, I would strongly recommend proceeding with your sale, moving up here into rented accommodation and fully familiarising yourself with your chosen area and how things work prior to buying.

We can, and do buy houses here before the sale of existing property is concluded, but that is usually dependent on a bridging loan of some sort - a temporary bank-type loan that tides you over until your house sells. But the bridging loan would also need to be in place before a solicitor would submit a legal offer, just in case the sale of the existing property fell through. You'd be left with 2 properties to pay the upkeep on plus the loan for the second one. I doubt very much is anyone would lend against your source of income being dependent on DLA.

The other main difference up here is that submitting an offer can bring about a closing date, which means the seller leaves the property on the market with a deadline for sealed bids and then the highest (or favoured) offer is accepted. But you still have the lawyer to pay for tendering the offer in the first place.

I am not an expert in any form of property buying/selling etc, but I have both bought and sold property in Scotland and it can be a real pain going to the expense of instructing your lawyer to note interest in the property, instructing a survey, gathering quotes for any necessary works, gathering all the relevant 'stuff' proving source and funds in place, instructing lawyer to proceed with a legal offer and then finding out you've been outbid when it goes to closing date.

First thing to do is contact a Scottish Solicitor Property Centre and speak to an expert who can talk you through the process. Then make sure you know you can pay for whichever house it is you want to buy and can prove the funds are ready and waiting to be transferred. Those are my suggestions, I hope they are of some help to you. Sorry I waffled on a bit, but I was amazed at how English property buying worked when I shared with a friend who bought a house in Suffolk.

missile

A prudent solicitor on either side of Hadrian's Wall will seek to advise you re funding, but there is no requirement in Scotland to

provide evidence that you have the funds in place to pay for the house BEFORE you can make a legal offer

It is now common practice in Scotland to bid "subject to survey" just like in England

googler

Offers subject to survey are becoming rarer now that a single survey is available via the Home Report (equivalent of a HIP). A home report should be in place for any property put on the market after 1.12.08.

theartfullodger

BunnyHankers...

Sorry to hear your history etc...

Get a scottish solicitor and talk to him & get his advice. Many estate agents in bonnie scotland are part of a solicitor's firm. Wherever you buy I'd advise, on principle, using a solicitor not connected to the EA you are buying from.

The Scottish system is, IMHO, simpler & quicker than in Engerland (I have property in both countries), but there are aspects of the Scottish legal system which are not so good. There are of course dodgy properties and sellers (and purchasers) in both places.

Best wishes with the move & to the dogs...

Cheers!

Lodger

PS Beware: There are many more people moving from England to Scotland during the summer than in winter (have ye tried the Highlands in February when the days are much-much-shorter than in the south-of-England, the sleet has been horizontal for 5 weeks-solid, and all the tourist shops/attractions/cafes/restaurants/pubs have been shut for 5 months.... (But the roads are freer of traffic, as long as the snow-ploughs get through)!!

googler

"I've been told I can't even place an offer on another property until my house sale is completed."

Well, strictly speaking, you can, there's nothing legally preventing it, but it sounds like you've encountered a solicitor who is unwilling to put an offer in for you since you don't have the finance definitely in place.

Also, consider things from the seller's perspective - they are more likely to accept an offer from someone who's ready to proceed, so if you get into a bidding war with another party who HAS sold, you'll likely lose out in the current market.... and your solicitor probably doesn't want to devote the time to what might be fruitless work.

If you REALLY want to offer on these properties, you could look around for another solicitor - I take it those you've spoken to already are Scottish solicitors?

googler

"Missives are not concluded until all funds to pay for the house, fees, legal costs etc have been paid. "

Er, no. Missives are concluded when the final exchange of letters takes place between buying and selling solicitors - at that point, there's a legally binding contract in place for one party to sell, and the other to buy.

Funds get paid to settle the transaction on the entry date, and fees, legal costs etc are usually settled shortly after.

googler

There's guidance and links to pdfs at The Law Society of Scotland

This is 'straight from the horse's mouth' and more reliable than any answers here (including mine!). Bon Chance.