Property
The rules for selling a property are different in Scotland from the rest of the UK. Here we explain exactly how the process works.
- The solicitor/estate agent
- Personal interest
- Choosing an estate agent
- The contract
- Charges
- Home Report
- Other services
- Receiving offers
- If things go wrong
In Scotland, home sales have traditionally been mediated by solicitor estate agents, who both market the home and handle the conveyancing. Both solicitor estate agents and non-solicitor estate agents can help you to buy or sell your home.
Both solicitor estate agents and estate agents help potential buyers find property and negotiate the sale.
Many offer or recommend additional services such as arranging Home Reports or conveyancing. Remember, you don't have to use any of these services. You do not have to accept your agents recommendation – you can shop around and may be able to get a better deal.
Usually, solicitor estate agents and estate agents work for sellers. Sellers are the clients. You pay the fees and the agent should put your interests first. An agent may not accept commission from both the seller and the buyer in the same transaction.
Using a solicitor estate agent or estate agent can be a complicated business, so it makes sense to know your rights, what the potential pitfalls might be and how to get problems sorted out.
Solicitor estate agents and estate agents provide advice and property details to buyers. An agent cannot act for both you and the Buyer.
Remember that the solicitor estate agent or estate agent may be in a position to benefit personally from the sale of a property. You must be told promptly, and in writing, if your agent, or a relative or business partner of the agent, wants to buy your home.
You can sell property yourself, but most people use a solicitor estate agent or an estate agent.
You should shop around for an agent. Ask for recommendations from friends and relatives who have recently bought or sold a house. Choose an agent who sells your type of property and offers contractual terms that suits you. Remember, you may be able to negotiate on fees and service levels.
You could use a solicitor estate agent or estate agent who subscribes to a voluntary code of conduct. You could use an estate agent who is a member of The Property Ombudsman (TPO) Scheme.
You can usually find a least one TPO member in the high street. Scheme members follow a voluntary code of practice which has been approved by the OFT and means that, if things go wrong, the TPO will help sort out the problem (see 'If things go wrong' below). For more information see codes of practice.
When you use a solicitor estate agent or a estate agent to help you sell a property, you have to sign a legally binding contract.
Before signing, read the contract carefully and make sure you understand it. Find out whether you have the right to cancel the contract. Check how long it will run. The contract should run for a reasonable length of time that is sufficient for the purposes of marketing your home effectively and finding potential buyers. Beware of contracts that tie you to an agent for a very long time.
If you are unsure, get advice from an independent solicitor.
You may come across some unfamiliar terms in a contract. Make sure you understand what you are agreeing to. The terms 'sole agency', 'sole selling rights' and 'ready, willing and able purchaser' must be explained in writing if they are used in a contract.
The solicitor estate agent or estate agent is the only agent with the right to sell your property. If you find a buyer yourself, you don't have to pay the estate agent's commission although you may still have to pay for advertising or a 'For Sale' board.
If you change from one agent to another, there may be a period when both agents' commissions are due if your property is sold.
The estate agent is the only person with the right to sell your property. It is different from sole agency: if you find a buyer yourself, you still have to pay the estate agent.
Ready, willing and able purchaser
You have to pay if the agent finds a buyer who is prepared and able to conclude unconditional missives for buying your property (the formal offer, its acceptance and any further exchanges of letters leading to the final agreement are known as 'missives'). You still have to pay even if you withdraw from the sale and unconditional missives are not exchanged.
Multiple Agency
Multiple or Joint agency agreements are rare in Scotland. You can though ask several agents to act for you on a multiple-agency basis. Only the agent who sells the property will be entitled to a commission. The rate of commission is likely to be higher than for a sole agency or sole selling rights contract.
A few estate agents offer a 'joint sole agency' contract where two agents agree to share one commission, although the total fee may be higher.
If you appoint more than one agent to sell your property under a sole agency or a sole selling rights contract, each agent has the right to claim their fee when the property is sold.
Before you sign a contract, the solicitor estate agent or estate agent must give you written details of how much you will be charged and when payments will be due.
The agent must state the exact amount you will be charged or, if this is not possible, the way the cost will be worked out and an estimate of the final amount.
You pay a percentage of the selling price of your property as a commission.
Some estate agents charge a low percentage plus an additional charge for advertising and 'For Sale' boards. In that case, the estate agent should tell you exactly how much the additional charge will be. If this isn't possible, you should be given an estimate of the charge and a breakdown of how it will be worked out.
Other agents charge a higher percentage of the selling price but this includes all costs.
Occasionally, an agent may charge a fixed fee rather than a percentage.
It should be clear from the estate agent's terms and conditions when you will have to pay. Fees are usually due on conclusion of missives.
Under a ready, willing and able purchaser contract, you have to pay as soon as a buyer who is prepared and able to exchange unconditional missives is found. This applies even if you withdraw your property before the sale is completed. The estate agent may also charge you for 'For Sale' boards and advertising.
If you change from one agent to another, there may be a period when both agents' commissions are due if your house is sold.
Since December 2008 sellers are legally required to commission a 'Home Report' before they put their house on the market. The Home Report can help you to decide whether to make an offer for a property, and if so how much to offer.
Sellers must provide potential Buyers with a copy of a Home Report within nine calendar days of request.
If you are not using a selling agent you will still need to compile a Home Report by instructing a Chartered surveyor registered with the Royal Institution of Chartered Surveyors to prepare a single survey with an energy report, and you must complete a property questionnaire.
Alternatively, your solicitor estate agent or estate agent can arrange for a Home Report to be prepared. You should shop around for the best deal.
The Home Report has three parts:
1. The single survey and valuation
The single survey report tells potential buyers about the type, accommodation, neighbourhood, age and construction of the property. A condition category will be given for each of 24 separate elements of the property surveyed, for example, the windows, external doors and roofing.
Category 1- no immediate action or repair is needed
Category 2- repairs or replacement requiring future attention, but potential purchasers are advised to get estimates.
Category 3- urgent repairs or replacements are needed now. Failure to deal with them may cause problems to other parts of the property or cause a safety hazard. Estimates for repairs or replacements are needed now.
2. A property questionnaire
The property questionnaire contains information for buyers much of which will also be useful for solicitors and surveyors. It includes information about: how long the seller has owned it, the council tax band, parking arrangements, issues that have affected the property such as a fire or storm, boundaries, any notices that affect the property.
3. An energy report
As in the rest of the UK, this provides an energy efficiency rating for the property and includes an Energy Performance Certificate
Solicitor estate agents and estate agents also provide services to buyers. They may organise surveys and valuations or arrange mortgages or life insurance. This is common when an estate agency is part of, or linked to, a financial institution such as a bank or a building society. You do not have to accept your agents' recommendation – you can shop around and may be able to get a better deal.
If your agent intends to offer services to the buyer and will receive a commission or an introduction fee, your agent must give you written details. If the buyer decides to take up the offer, you must also be told in writing. This applies even if the agent offers services through someone else.
You would normally ask your agent to pass on, in writing, offers over a set price. This is an indication of the lowest offer you would be prepared to accept. If several potential buyers are interested in your property, your agent will fix a 'closing date', specifying the latest day and time offers can be received.
This should be set far enough ahead for potential buyers to arrange a valuation or survey and a mortgage if necessary.
Sellers usually accept the highest offer but you do not have to, or indeed any offer at all. For example, if the highest offer comes with conditions you don't want to accept , then you should find out whether there is any room to negotiate more favourable terms. If there is not, you will have to decide whether to accept one of the lower offers or re-advertise.
If the property is offered at a fixed price, the first offer to be received is normally accepted.
If you have a ready, willing and able purchaser contract and an offer for the price you set has been received from someone prepared and able to buy your property, the agent can claim commission even if you don't accept the offer. You may also have to pay the agent if you withdraw before an agreement is reached. It depends on what happens during negotiations.
Once you accept an offer, you then instruct your legal adviser to send a formal qualified acceptance to the buyer's legal adviser (a legal adviser can be a solicitor or an independent qualified conveyancer). Your qualified acceptance will say which terms in the offer you accept and which you do not.
There will be an exchange of missives, negotiating the terms of the offer and acceptance. During this time, both you and the buyer can pull out of the deal. But once an agreement has been made and the missives have been concluded, the contract is binding.
Just before the settlement, you should sign the disposition and arrange to hand over the keys.
In relation to solicitor estate agents, the Scottish Legal Complaints Commission (SLCC) deals with complaints from consumers about services provided by solicitors. The SLCC will pass complaints alleging professional misconduct or unsatisfactory professional conduct to the Law Society of Scotland (LSS) for investigation.
The SLCC also has a general power to oversee how the LSS and profession deal with complaints. If a complainer is unhappy with the way the LSS deals with the complaint, they can complain to the SLCC about the ‘handling’ of it using the following link: www.scottishlegalcomplaints.org.uk
In relation to estate agents, all estate agents engaging in residential estate agency work must belong to a redress scheme approved by the Office of Fair Trading.
This means that actual and potential buyers and sellers of residential property with complaints about estate agency work will be able to use a free, easily accessible, and fair estate agents redress scheme, which will have the power to make a range of awards, including requiring a member to pay compensation.
There are currently two approved schemes, operated by The Property Ombudsman and the Surveyors Ombudsman Service.
Further information on the redress schemes can be found on the OFT website.
