Looking to get on the property ladder?
The good news is that the buying process is fairly straight forward in Scotland but will require a bit of planning on your part.
So here are some things you will need to consider:
Where To Buy?
If you are new to the city or town where you are planning to buy then some research on locations and their amenities (e.g. transportation links, parking availability, local amenities etc) is advisable. If you already live in the city or town then you may well know your preferred areas. Prices can range considerably for the same type of property depending on the locale, so you need to consider this in the context of your budget and your property size needs.
Your local solicitor’s property centre is a good place to start your search for a property as this will list local properties for sale. These Property Centres have city offices where you can visit or you can check them out online which is the most convenient way to do your searching. In some Scottish cities there will also be estate agents advertising properties for sale and their advertised properties are often found on the Rightmove website: www.rightmove.co.uk.
Do you know your budget?
You will need to have some savings for a deposit if you require a mortgage (which most buyers do). Lenders will usually only lend first time buyers a maximum of 95% of the purchase price.
Assuming you need a mortgage have you established how much you can obtain and afford to repay? You should contact a mortgage broker or your bank to establish whether you can get a mortgage and if so how much and what your monthly payments will be. It is a good idea to shop around to get a couple of competitive quotes, as loan rates and offers vary between lenders.
You will need to have funds to pay your lawyer’s conveyancing fees and the Land & Buildings Transaction Tax (LBTT). These fees and taxes are usually payable up front. Conveyancing fees will vary between solicitors and will likely be determined by the value and type of property you are buying. It is a good idea to get a couple of quotes from solicitor firms to establish what these fees will be: check out www.pingalawyer.com which is a free service connecting you with multiple solicitor firms for quotes. The LBTT is calculated on the purchase price of your property. Your solicitors are duty bound to collect this indirect tax from you on behalf of Revenue Scotland. If your purchase price is below £145,000 (as of May 2017) then there will be no LBTT. The solicitor’s fee quote will give you a clear breakdown of all their fee and outlay costs and the estimated LBTT.
Using a Lawyer
You will need a solicitor to undertake your legal work. It is recommended that you contact and appoint a solicitor as soon as possible when you have decided and are ready to start the process of buying a property.
If you use local lawyers they will advise you on the current market conditions and what you can reasonably be expected to pay for a property in your range. In a bullish market it is likely you will have to pay more than the property valuation especially if the property sale goes to a closing date which is a sort of blind auction. Conversely, in a bear market you may well be able to buy your property at a price below the valuation depending on the seller’s circumstances.
In Scotland it is the seller’s duty (where the property is being marketed) to provide a Home Report at their own cost. This is a surveyor’s report which indicates the market value and condition of the property highlighting areas where improvements to the property may be required. The mortgage lenders will rely on this report in determining the loan amount they will provide.
Happy house hunting and good luck!