Buying a house before we have sold ours

Walkies10

We have our house on the market but have found the perfect property, unfortunately in Scotland. We own our existing property outright but bearing in mind the Scottish system, is there a way of raising the money to put an offer forward? Our existing property is valued at significantly more than the one we would like to purchase.

jennifernil

Nobody will stop you making an offer, and it is not binding till missives are completed, but if you do that you will have to agree an entry date and it will be up to you to somehow have the money available on the date of entry.

If your present property is not sold by then, you would need to find the money somehow.....for example a bridging loan.

As you have no mortgage at present, you could also consider taking a mortgage on the new property, do you have some cash for a deposit and fees etc?

Walkies10

Yes we have funds available for a deposit

jennifernil

In that case I would look into whether you can organise a mortgage if it becomes necessary.

You could get a decision in principal and go ahead with the application if your present house does not sell.

Buying a house in Scotland is generally a much quicker process than in England. You need to offer via your solicitor and he will advise you that you will need to come up with the money on the entry date. He should also advise you that it would not be a good idea to make an offer if you do not have a plan for raising the funds.

Last time we bought a property it was quite usual to buy before selling, but getting a mortgage is more complicated and difficult these days .

If you do not sell before buying, you will also incur the extra LBTT, an extra 3%, and you will have only 18 months in which to sell the other property and reclaim this.

Walkies10

Thank you and excuse my ignorance, but what is the LBTT?

davidmcn

Walkies10 wrote: »

Thank you and excuse my ignorance, but what is the LBTT?

Land & Buildings Transaction Tax, i.e. the devolved equivalent of Stamp Duty Land Tax.

https://www.revenue.scot/land-buildings-transaction-tax