Before you can put in a bid on a property, you need a mortgage lender to confirm that it is prepared to lend you money. This is called a mortgage ‘in principle’. Without this, your offer won’t be taken seriously.
Check your mortgage and deposit will cover the value of the property you would like to buy.
Our HomeFinder tool will show you the approximate cost of property in any given area and whether you might be able to get a mortgage based on your income and expenses.
Once you have agreed a mortgage ‘in principle’ you may have to pay a booking fee or other fee to reserve it. Typical cost: £99-£250.
Do't overstretch yourself
Remember there are many other expenses you will need to cover, including mortgage fees, legal fees and, on properties costing more than £145,000, Land and Buildings Transaction Tax.
Stage 2: Find a solicitor
You’ll need a solicitor before you can make an offer on a property. Solicitors are responsible for putting in the offer, negotiating and checking the contract as well as organising the transfer of the Title and money. Find a solicitor or qualified conveyancer on the Law Society of Scotland website.
'Note of interest'
When you’ve found a property you want to buy, your solicitor will register a 'note of interest' with the seller's agent. This shows that you are interested in the property and want to be kept advised of developments such as the fixing of a closing date to submit offers.
What do solicitors do?
Your solicitor will
- Carry out searches in the property and personal registers to ensure that there is nothing which might prevent the seller from being able to sell the property.
- Check with the local authority to see if there are any planning issues that might affect the value of your property and whether any roads next to the property have been adopted by the local authority.
Most solicitors request payment for their work after completion but you may have to pay a deposit, or pay for searches upfront.
If the sale doesn’t go ahead, but you paid for the search upfront, then you’ll have wasted your money, so it’s worth carefully considering this in advance.
You can also instruct your solicitor to carry out the search once the offer has been accepted but this will need to be agreed with the seller as a condition of the sale going ahead.
As a result, the seller may be reluctant to agree to this as the findings may give you a reason to ask the seller to lower their price, or even back out from the sale altogether. Typical cost: £250-£300.
Stage 3: Home Report and survey
Before marketing the property for sale, sellers have to arrange a Home Report to show to buyers interested in their property. This must include:
- Survey – an assessment by a qualified surveyor from the Royal Institution of Chartered Surveyors (RICS) pointing out the condition of the property, where repairs are needed and a valuation of the property. A mortgage valuation may also be included. The level of information contained in the survey is broadly equal to the Homebuyers report mentioned below
- Energy Performance Certificate (EPC) – this reveals how energy efficient the property is and where improvements could be made
- Property Questionnaire – sellers have to provide an accurate account of the property including its Council Tax band, any Local Authority notices served on it, alterations made, parking, any history of flooding as well as factoring in arrangements covering any repair and maintenance.
When you receive the Home Report for the property you want to buy, make sure to read it carefully. It will give you a good idea of the running costs of your new home. You can also use it to ask the seller about utility bills.
Your mortgage valuation report
Once you have a mortgage in principle, your lender will arrange for a mortgage valuation to make sure the property you’re buying is worth the price you’re paying. Your mortgage lender may rely on the mortgage valuation contained in the Home Report if it includes one or require an independent one.
Typical cost: £150-£1,500 depending on the value of your property. Some mortgage deals come with free valuations.
You will also need to decide if you wish to rely on the survey contained in the Home Report or obtain your own survey. The surveyor who prepared the survey contained in the Home Report has a statutory duty of care to the seller who instructed it and to you as the buyer.
If you decide to get your own, there are three types of survey:
- Home condition survey – the cheapest and most basic survey. Suitable for new-build and conventional homes, but not useful for spotting any issues with the property. Typical cost: £250.
- Homebuyer’s report – a more detailed survey looking thoroughly inside and outside a property. It also includes a valuation. Check whether you can get the valuation and homebuyer’s report done at the same time to cut costs. Typical cost: £400+.
- Building or structural survey – the most comprehensive survey suitable for an older building or one of non-standard construction (for example, if it’s made of timber or has a thatched roof). Typical cost: £600+.
Search for a local surveyor on the Royal Institution of Chartered Surveyors website.
Stage 4: Making an offer
Once you have the survey results, and are happy with what it says, you need to decide how much you’re going to offer. The amount you offer will depend on:
- Property prices in the area
- How much you can afford
- Any competing interest in the property, and
- Anything else you wish to be included in the offer such as fixtures and fittings.
Your solicitor will do this in a formal letter.
If there are several competing bids, the seller’s solicitor will open them at the same time on the closing date and ring your solicitor to tell you if you’ve been successful or not.
You may wish to wait until your offer is accepted before having your own survey done, in which case you make your offer subject to survey.
If your offer is accepted
If your offer is accepted, the seller’s solicitor issues a qualified acceptance, which means that the property will be yours if contract details can be worked out. The solicitor will also hand over information about the property such as the title deeds and planning papers.
Go through everything you receive with your solicitor as they may raise queries about the paperwork. Neither you nor the seller is committed yet.
Stage 5: Agreeing the contract
Once all the contract details have been agreed, the two solicitors exchange letters. These letters are known as ‘conclusion of missives’. Both parties are now legally committed to the sale.
After the conclusion of missives you may have to pay a holding deposit – typically £500-£1,000 – to secure the deal. It is not common to be required to pay this holding deposit as there are usually penalty fees in the contract to deter either party from backing out at this stage.
Once you’ve agreed the contract, you need to shop around for buildings insurance - see Insurance for your home.
Consider protecting yourself and your new home with contents and life insurance.
Your solicitor will check the title deeds and discuss with you the ‘title burdens’ – conditions attached to owning the property ranging from where rubbish bins can be put to more serious restrictions on how the property can be used and altered.
The seller then signs the transfer of the title deeds, known as the 'disposition'.
Contact your lender
Next, you or your solicitor should contact your mortgage lender and let them know that the purchase is going ahead along with the proposed date of entry. This will allow your lender to issue their loan and security instructions to their nominated solicitor. In addition, this will also allow the lender to prepare the release of their loan monies to allow the sale to complete on the date of entry.
The arrangement fee
There is often a fee to set up the mortgage – usually referred to as an arrangement fee. In many cases this can be added to your mortgage, but choosing this option means you’ll pay interest on it for the length of the mortgage. As a result you'll pay more in the long run than if you paid for it upfront.
Stage 6: Completion and final steps
After your offer has been accepted, the sale will be completed on the date of entry agreed with the seller.
The seller’s solicitor will ask your lender for the remaining money owed (usually 90% if you had to pay a holding deposit) in preparation for the date of entry. If you are a cash buyer you’ll need to pay the rest of the purchase price via your solicitor.
Other fees you may need to pay now
Your lender may ask you for:
- A fee for transferring the money, typically £40-£50
- A fee of £100-£300 for setting up, maintaining, and closing down your mortgage account
The seller’s solicitor will also prepare the Land Transaction Return for you to sign.
You’ll need to pay your solicitor’s bill at this stage, minus any deposit already paid. Typical cost: £400-£900 plus 20% VAT. If you haven’t yet paid for searches, their cost will be included in the bill along with other fees paid on your behalf.
They will also arrange for the signed title deeds to be registered with the Land Register. The cost starts at £60 and rises, depending on how much you’ve paid for the property.
LBTT returns can be submitted using the Revenue Scotland online portal. If you wish to submit a manual return, a paper LBTT form is also available along with a guide for ‘how to make a paper return’. However, if you choose this route you will only be able to pay LBTT by cheque.
The new rates will only be payable on the proportion of the total value which falls within each band. In Scotland, buyers will pay
- 2% for homes that cost between £145,000 and £250,000
- 5% for homes that cost between £250,001 and £325,000
- 10% for homes costing £325,001 and £750,000
- 12% for homes that cost more than £750,000
Additional residential properties in Scotland (such as buy-to-let properties and second homes) of £40,000 or more will attract an additional 4% of the relevant consideration on each band.
Tax relief for a first-time buyer acquiring ownership of a dwelling, provided certain conditions are met may also be available.
See the Register of Scotland fees calculator.
If you’re using a removals company, consider moving on a weekday which is usually cheaper.
Bear in mind that you may be able to get a service removals allowance to help with the costs - see JSP 752 on the Intranet and speak to unit HR.