There’s a first time for everything in life; passing your driving test, travelling abroad or dipping your salty fries in a sweet vanilla milkshake (sounds disgusting, I know, but you are missing out if you haven’t tried this heavenly combination). However, the biggest “first time” for many people may be purchasing their first home. Gone are the days of getting your parents to call the doctor for you or having your dinner made every night; Welcome to the world of “adulting”. It is both exciting and terrifying and while I may not be able to help you with the other two examples I just mentioned, I can guide you through the process of buying your very first home and hopefully make the experience a little less scary.
Picture this: you scroll through Zoopla looking at houses as if you were window shopping, imagining what you could do with that spare bedroom or the large shed in the garden. However, you then spot the perfect property and it’s love at first sight. But what exactly are you supposed to do next?
If you are buying with a mortgage the first thing you will want to do is check how much you can borrow as you want to ensure that you are offering on a property you can afford. You could either approach a financial advisor or contact the mortgage lender directly to obtain what’s called a “mortgage offer in principle”. Now, it’s important to remember that the mortgage offer at this stage is not set in stone and the lender can still refuse to lend you money. The mortgage offer in principle is simply an indication of your borrowing limit to allow you to offer on a property within your financial means.
Approach your solicitor
Once you have your shiny new mortgage offer in principle, you need to approach your solicitor to submit the offer on your behalf. First thing they will do will be to verify your identity so make sure your passport and driving licence are up to date with the correct address on them. They’ll ask you a series of questions, such as how you are funding the purchase and if you are happy with the Home Report. If you are buying with a mortgage, your solicitor will make your offer subject to mortgage, which tells the seller that you cannot buy until the mortgage lender has issued its final loan papers to you and your solicitor. If you using the money from a sale, which has not completed yet, then your solicitor will make your offer subject to sale. This tells the seller that you cannot buy until you have a contract in place for your sale. Both of these conditions are important as you do not want to commit yourself to buying a property until you know the funding you need will be in place. So, you have your mortgage offer in principle in place and the initial formal process of submitting the offer has been done – now what?
If your offer has been accepted, you may feel the need to immediately head to IKEA and buy all the flat packed furniture to your heart’s content. However, hold your horses as at this stage you are not guaranteed to get the property. It’s important to remember that once an offer has been verbally accepted, your solicitor and the seller’s solicitor will commence the conveyancing process and until both parties are satisfied with all the conditions of the contract (often referred to as “the missives”), there is no legal contract in place for you to buy or the seller to sell and both parties can walk away from the transaction without any financial penalties due. (I know, insert big shocked face here…) This is of course a bit of a catch 22 as more often than not, missives don’t get concluded until very close to the agreed date of entry. This can be due to a number of reasons such as the loan offer not being available or waiting on third-party reports. So, on one hand you don’t want to jump the gun and spend money on something which isn’t guaranteed, but on the other you do want to be organised and not leave everything to the last minute. It is therefore important that all parties are provided with regular updates so that informed decisions can be made.
Documents to expect
There will be lots going on in the background during the conveyancing process but to keep things simple, there are a few main documents you will need to be aware of. Firstly, your solicitor will examine the titles of the property you are purchasing. This is to ensure that there are no legal issues with the property and that you will obtain all the necessary rights to enjoy full use of your new pad. Your solicitor will then provide you with a Report on Title which will outline the various rights and obligations you will have. Moving on, if you are buying with a mortgage you need to read through your loan offer carefully and raise any questions you may have with your solicitor or financial advisor. You will also be asked to sign a document called the Standard Security which is you granting the mortgage lender their “security” over the property. This essentially means that you cannot sell the property without paying off the mortgage. Finally, another important document in the conveyancing process is the “Disposition”. This is the document that will register the title of the property in your name, showing you as the owner in the Land Register of Scotland once everything has been processed. Only the seller will sign this but you will want to read the document and ensure your name and address are correct; I’m looking at my fellow people with unusual names who will understand my pain!
Phew – you’ve made it this far and you’re nearly there. Settlement is the date of entry and the date on which your solicitor pays the purchase price to the selling solicitor on your behalf and in exchange you obtain the keys to the property. On the morning of settlement, your solicitor will receive a final report from the selling solicitor to ensure that everything is still as it should be with the property. Once the selling solicitor receives the purchase price they will then allow you to pick up your keys and you are officially a new home owner. But the work doesn’t stop there as your solicitor will then submit various applications to register your title in the Land Register of Scotland and hopefully within a few months the new Title Sheet is issued showing you as the proprietor of the property – congratulations!
Hopefully this blog clarified the process of buying a new home but it is important to remember that every property is different and things can crop up during the conveyancing process which may delay matters. The important thing is to communicate with your solicitor and ask if you are unsure – no matter how silly you think the question is!
If you are thinking of buying or selling a property within Scotland, please contact a member of the Blackadders Residential Conveyancing Team working in Aberdeen, Dundee, Edinburgh, Glasgow, Perth and across Scotland.
Zeenat Reid, Solicitor
The opinions expressed in this blog are of the author only and do not necessarily represent the opinions of Blackadders LLP.
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