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Country&#39s conveyancing system has its tensions but remains popular

Scotland operates a different conveyancing system to England and Wales, and although generally considered less tortuous, it does put different pressures on buyers and sellers.

In Scotland, the contract is formed in a series of letters known as missives which are signed by both the buyer&#39s and the seller&#39s solicitors. It becomes legally binding at an early stage in the housebuying process.

Sellers put their houses on the market on an &#39offers over&#39 basis, usually soliciting several offers, particularly in the current period of heavy demand. Once made, offers are legally binding and neither party can withdraw without being held liable for any resulting losses for the other party.

Everybody has to put in a sealed offer by a set date which means purchasers have to second-guess and outbid other offers. There&#39s no opportunity for haggling or pulling out. When demand is strong, this system benefits the seller. In Head of Muir, a three-bedroom bungalow on the market for four weeks at offers over £72,000 recently sold for £92,100, more than 30% over the asking price, says the Edinburgh Solicitors Property Centre.

But Bill Moncrieff, director of Clarkson Hill Mortgage Company, says the system of blind bids shouldn&#39t be blamed for rising property prices. “Buyers don&#39t just pluck figures out of the air. Their solicitor will look at the last time the property was sold, prices generally in that area, and how far buyers typically bid over the offer price. Only then will they make their recommendation.”

The highest bid doesn&#39t always win the property. Each offer will also include a named date of entry into the property which could be weeks or months hence. Somebody offering a lower price could secure the property if their moving-in date fits in with the seller&#39s plans.

This means gazumping doesn&#39t exist north of the border but the drawback for buyers is that they must pay for their own survey and valuation, which costs several hundred pounds. This is wasted money if they come second in the bidding war – particularly if they lose out on a string of properties. This problem affects one in three buyers and reports that never lead to sales cost £9m a year.

A further problem for buyers is that after their bid has been agreed they have to move home quickly. If they fail, the offer is still legally binding and they may have to ask their bank for a bridging loan. The system also causes difficulties for sellers because once the sale and moving-out dates are agreed they must leave their home even if they fail to find a new property. They also have to put themselves through the blind bidding process.

The Scottish Executive is committed to a pilot project designed to cut down on multiple surveys by making the seller responsible for commissioning a stage two full structural survey. But the June launch date is under threat after the Royal Institute of Chartered Surveyors expressed its lack of confidence in the scheme, claiming it was being driven through with “unseemly haste”.

“Although it is a pilot scheme it is dealing with real people, real properties and real money, and there is a lasting responsibility to all those involved to get it right,” says RICS director Peter Miller.

The Scottish conveyancing system may continue to have its tensions but nobody north of the border would swap it for the vagaries of the English system.


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