Delving into the world of Scottish Property Auctions can be both thrilling and daunting, particularly if you are new to the process. Scotland’s property landscape varies compared to the rest of the UK. This distinction extends to property auctions. To make the most of this unique experience and avoid any pitfalls, we’ve written a handy guide below.
We highlight eight essential factors to consider when bidding for property in Scotland. From deposit requirements to contracts and additional fees – we ensure you are well-prepared for a successful and smooth auction experience. So let’s dive in and explore what awaits you in the world of Scottish property auctions!
8 Things to Consider With Scottish Property Auctions
- Deposits are rare in Scotland but at auction, the purchaser will immediately have to pay a non-refundable deposit. This will be deducted from the balance of the purchase price.
- The contract for the purchase of property in Scotland is usually formed by an exchange of letters, known as missive letters. These are between the solicitors acting on behalf of the purchaser and the seller. Clauses such as ‘subject to sale’ or ‘subject to mortgage’ are commonly included in the first missive letter. This is known as the ‘offer,’ which is usually submitted by the purchaser’s solicitor to the estate agent. Only once all the terms are agreed are missives said to be ‘concluded.’ This process normally takes several weeks. If successful at an auction, however, the purchaser will immediately sign a contract called ‘articles of roup’ and will be bound to proceed. There will be serious financial penalties if the price is not paid in full when due. If this happens, the purchaser will be in breach of contract.
- The purchaser is deemed to be satisfied with the title deeds, condition of the property etc. when they make a bid. There is no opportunity to check these at a later stage, so the legal pack should be looked at carefully in advance. A solicitor can help with this.
- The seller is unlikely to produce a home report or EPC (energy performance certificate). We would never advise buying a property without a survey of some description. Before you proceed, find out if you are able to arrange a survey.
- Searches are usually provided at the seller’s expense. However, following an auction sale, the seller won’t be liable to produce these. Therefore, this is another expense which falls to the purchaser – which could cost around £200.
- Further fees are likely. In addition to their own legal fees, a purchaser may have to pay an auction fee and/or the seller’s legal fees. Neither of these sums will be deducted from the purchase price. If there are any outstanding notices or monies owned to a factor or the local authority, these may also become the Purchaser’s responsibility.
- Usually, the date of entry will be around 6-8 weeks following submission of a successful offer. At the auction, the purchaser will be expected to pay the balance of the purchase price in full within 28 days. As so, immediate access to funds is necessary.
- Risk usually only passes to a purchaser on the date of entry. Following an auction purchase, buildings insurance must be arranged by the purchaser immediately.
In conclusion, navigating property auctions in Scotland can be intricate or complication, making the guidance of experienced professionals like Oracle Law indispensable. Our team offers bespoke legal services to address your individual needs, from reviewing legal packs to assisting with documentation.
Let Oracle Law be your trusted partner, helping you bid confidently and maximising your chances of success. Reach out to us today.