How does the Scottish system work?

AdrianC

rpc wrote: »

I have only ever moved by trying to sell first and setting a long completion date. In my last move, we were selling two properties and buying one. One property didn't sell but we could take a larger mortgage to cover the gap with no early redemption charges on the extra bit.

First time round, we completed on both the same day.

So a chain, exactly the same as in England.

Prior to conclusion of missives, you can still withdraw. After missives are concluded, you are committed.

So "missives" is the same as "exchange" in England.

I would say that changing entry date during missives is probably harder than doing it pre-exchange in England because you are really at the draft contract stage as soon as the offer is accepted.

More akin to the way purchasing at auction works in England, then, in that you've exchanged contracts on hammer fall.

That's up to you and your solicitor, but I have never paid anything other than survey, home report and advertising costs before completion.

Survey and report would be the buyer's cost here, with different levels of survey available (at different cost) to suit the buyer's preferences. I find the thought of relying on a survey the vendor has paid for somewhat... dubious - which is one of the reasons why HIPs (where the vendor paid for survey etc at the start of marketing) were fairly short-lived.

missile

IMHO, the significant difference is gazumping and gazundering are eliminated.

googler

AdrianC wrote: »

So how does the Scottish system work, where you need the money from the place you're selling in order to buy the one you're moving to?

You sell and buy with the same entry date for each property, or arrange the entry date for the sale to be earlier than the entry date for your purchase. That must be the same in E&W, surely?

AdrianC

Exactly the same. Hence my confusion as to how the Scottish system avoids chains.

Pixie5740

It's not exactly the same as in E&W. Mostly because buying and selling property is done through solicitors rather than estate agents. Solicitors are bound by the rules of the Law Society of Scotland, even in their estate agency work, whereas non-solicitor estate agents are unregulated. These rules state that, once a solicitor has agreed to accept an offer from a property buyer then that solicitor cannot then accept an offer from another buyer. Quite simply, as a result of the rules of the Law Society of Scotland, the governing body for solicitors in Scotland. It’s a disciplinary offence for a solicitor firm to act in that way. This is before the missives (exchange) have been concluded which usually happens within day or weeks.


However, this doesn't prevent a vendor from accepting another offer but if the vendor does wish to accept an offer after initially accepting an offer from someone else, their solicitor is bound by Law Society rules to withdraw from acting on your behalf in the sale of the property. You can, however, instruct another solicitor to act on your behalf and any better, subsequent offer can be sent to them by the new buyer’s solicitor. I haven't ever heard of anyone doing this though.


In Scotland the vendor also pays for the Home Report survey which is sufficient enough to get a mortgage with so there shouldn't be any nasty surprises turned up during a survey like can happen in E&W.


It's why the whole process of buying and selling moves much more quickly in Scotland rather than these ridiculous chains you have in E&W where people make offers when they're not really in a position to exchange or complete any time soon and there guzundering, gazumping and collapsing chains left, right and centre.

AdrianC

So the most relevant difference is that gazumping/gazundering is just simply not allowed, unless under strict circumstances that introduce a bunch of hassle?

Pixie5740

Pretty much. I think buyers have the mortgage in place before the solicitors will allow the missives to be concluded too.


Edit: I also think that as offers are made via your solicitor, the solicitor will ensure that you're going to be able to proceed.

Hoploz

I suppose if you have a valuation done by the vendor at the beginning of the process this prevents anyone dropping out due to mortgage valuation coming in lower than the agreed selling price in e&w.

It would also avoid sellers advertising at some daft price much higher than the value, as does happen in e&w, in the hope some fool will buy it. Asking prices must be more realistic. I saw last night n Phil n Kirsty that they ask lower than the valuation price so I guess that is ideally the max you would pay.

I_have_spoken

Few years back, I sold in England and bought in Scotland. I was living in the new house for several weeks before the sale in England completed and I was able to unwind the bridging finance, to my great relief!

There are some advantages to the Scottish system. IIRC the 'sealed bid' approach is definitely binding, in E&W 'sealed bids' can always be counter-offered via the EA.

NB I offered less than the 'fixed price' the house in Scotland was advertised at. With the slow market, this and 'offers over' have become less relevant.

hcb42

Hoploz wrote: »

It would also avoid sellers advertising at some daft price much higher than the value, as does happen in e&w, in the hope some fool will buy it. Asking prices must be more realistic. I saw last night n Phil n Kirsty that they ask lower than the valuation price so I guess that is ideally the max you would pay.

My experience is this is far more prevalent in Scotland with Offers over sometimes being for silly amounts, which is less common in England/Wales. Perhaps not lately, but certainly at the height of the market.