KEY DIFFERENCES BETWEEN HOUSE BUYING AND SELLING ACROSS GREAT BRITAIN

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The conveyancing process for house buying and selling in England, Wales, and Scotland or vice versa is often difficult to understand for Vendors and Purchasers alike, not least of all because the processes are different in the two places. 

Cross Border Qualification 

When moving from Scotland to England or Wales, or vice versa, you will need two solicitors, one for the transaction in England or Wales, and one for the transaction in Scotland. This is because a solicitor dealing with the house buying in one country may not be qualified to practice law in the other. With this comes all the associated issues of communication and co-ordination, making sure the correct documents are prepared and submitted at the correct time, while dealing with two different teams, often with different ways of working, different opening hours and different means of keeping you informed of progress.  

Marketing 

Homes in England and Wales are marketed by estate agents, who will recommend a price which, if the vendor agrees, will become the “advertised price”. This price of course is negotiable, and the advertised fee is intended as a guide price. Even after acceptance, the seller can back out in favor of a higher offer. 

On the contrary, in Scotland, solicitor firms are often responsible for marketing properties, rather than estate agents. This is because most residential conveyancing firms in Scotland also have an estate agency department. This may be easier for Scottish vendors and also to some extent the house buying party, as they only have one firm to deal with rather than separate entities. 

The properties in Scotland either marketed as offers 'over' a certain price, or at a fixed price.  

If it's at 'over' a given price, potential buyers will be asked to give sealed bids and timescales of purchase to the solicitors marketing the property. The highest bidder will win, and they will be told on the same day, making the procedure much more certain in Scotland. If the sale is at a fixed price (most common when market conditions are challenging or the seller wants a quick sale), the first person to offer the required amount will be the successful party. 

Conclusion of Missives vs. Exchange of Contracts 

In England and Wales, after accepting an offer from one party, sellers sometimes go back on the agreement in favour of a higher offerThis is known as “gazumping”. Sometimes a ‘contract race’ takes place, which means the vendor has accepted offers from two buyers, they will state that the first party to be ready to exchange contracts will be successful. This can be done until the contracts are exchanged, which happens at the very end of the process, sometimes even on the day of completion. 

This is not ideal for the house buying party, as another buyer may ‘swoop in’ with a higher offer the day before completion when everything is organised. This also causes problems for the housing chain, as it could delay the buyer in selling their current property. Even once contracts are exchanged, the only penalty for a buyer who wishes to withdraw is the loss of deposit. 

However, in Scotland a contract becomes binding at the “conclusion of missives”, which are formal letters of negotiation between the two parties’ solicitors. Once the seller has concluded the contract for purchase the property is taken off the market and neither party can then withdraw without incurring liability for breach of contract. A solicitor will refuse to act for any seller who later accepts an offer from someone else unless the original offer has fallen through.  

In England and Wales deals often fall through after acceptance of offers while the contract is being negotiated, due to the purchaser being unable to obtain mortgage funding. While in Scotland, as the contract will already be binding at this stage, solicitors usually insert a condition into the offer stating that the offer is conditional upon the purchaser receiving the loan. 

Home report and Surveys 

In Scotland the seller provides a Home Report which includes a 'single survey', which is usually provided by a Chartered Surveyor, a pre-sale questionnaire personally completed by the seller and an Environmental Performance CertificateIn many cases, this is all the buyer needs and these surveys and reports will also be acceptable to lenders. However, if the surveyor who conducted the Home Report is not on the lender’s panel, matters cannot be progressed until the lender instructs their own surveyor.  

By contrast, the English principle of ‘Caveat Emptor’ is a Latin phrase meaning “let the buyer beware.” This means that the onus of checking the legal title to a property before committing to purchase it rests with the buyer, and the only upfront information required in England and Wales to market a home is an Energy Performance Certificate. Once an offer has been accepted the buyer can then choose to organise a survey of the property. For this reason, English conveyancers must ensure that they are satisfied that the legal title to the property is good, marketable and free from defect whilst also establishing that their clients have sufficient funds with which to purchase the property. 

Once the contract papers have been received from the seller’s solicitor, the buyer’s conveyancer will apply for a Local Authority search, a Water and Drainage search and an Environmental search. A high proportion of negligence claims against solicitors are related to conveyancing, and so it is crucial that all enquiries about the legal and marketable title to an English property are undertaken and satisfactorily addressed, prior to the parties being legally bound at the exchange of contracts. 

In 2007, the Government tried to imitate the Scottish system with the introduction of Home Information Packs. But, after a disastrous roll-out, the packs were soon scrapped in 2010. 

Are the systems compatible?

Despite the numerous differences between the two systems, it is possible for the systems to co-exist, and to carry out transactions buying one property and selling another. When dealing with a cross-border sale and house buying, the conveyancer must ensure that the missives are only concluded on the Scottish transaction when parties are ready to exchange contracts in respect of the sale/purchase in England. If they fail to do this, they may end up with a situation where a vendor of a Scottish property is bound to sell, but the transaction for the property they are purchasing in England falls through due to a higher bidder, leaving the client with nowhere to live. 

Disclaimer – our articles are designed to give you guidance and information.  There is no substitute for proper direct advice, particularly as everyone’s circumstances are different.  If anything in this article may affect you, please contact us for advice that is specific to your circumstances. 

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