How to buy a house in Scotland
Complete guide to house buying as an expat living in Scotland
Scotland is an incredible place to live. Whether you live in a city or suburb or a small village on a faraway island, it offers something for anyone. Buying a house is always a difficult and stressful process. But if you are an expat who doesn’t have an address history of more than 3 years, you will probably be wondering whether it is the right decision to buy a house soon.
I was always uncomfortable paying rent. I just feel paying rent is a waste of money compared to paying a mortgage. So I went for buying a house at the first opportunity I got.
This post assumes that you already know the price range of the house you are looking for and the number of rooms and the areas you love to live in. If you don’t have this already, please take a moment to discuss this with your family and get a rough idea. You can always change this when you start looking at houses. Our final requirements for the houses were nowhere near the first requirements we came up with.
ESPC is the one-stop-shop
If you are in Scotland, especially in Edinburgh, I would highly suggest using the ESPC website and/or mobile app to search houses. You can also set notifications for the criteria looking for and they will notify you when a match comes.
We also looked at Rightmove and Zoopla. However, I found ESPC always covers what you have in Rightmove and Zoopla. The only exception that I found was for new builds Rightmove and Zoopla had more choices than ESPC.
Just use these websites generally to do your research on houses and their prices.
Get a solicitor
If you are serious about buying a house, getting a solicitor is the very first step. Do a search in the market for the reviews. I got a couple of recommendations from friends who recently bought houses. I got quotes from all of them and chose the one I liked. I didn’t go for the cheapest nor the most expensive one. Here is the one I selected. Having a good relationship with your solicitor is very important and you also need to select someone who is very responsive.
Get an agreement in principle
If you are looking for houses, you need to have an agreement in principle at hand. I have encountered some cases where the house viewings also needed an agreement in principle. This is where the situation can become very tricky for expats. Almost all online agreements in principle processes failed me because I did not have more than three years of address history. Even my own bank failed me in this. The messaging was vague when the online request for agreement in principle failed and I was wondering for quite some time to figure out why it was failing and was genuinely afraid that it’s because of my credit score.
If you can’t get the agreement in principle online, the easiest way is to get a mortgage advisor. Even if you have an agreement in principle at hand, I would highly recommend getting a mortgage advisor as it makes the whole mortgage process much easier.
Get a mortgage advisor
There are two types of mortgage advisors. One type belongs to the financial institutions that provide mortgage services and the others are independent. Always go for an independent mortgage advisor because they will help you select from various mortgage products across financial institutions.
Did I forget to tell you that they are free? Oh yes. This is the great thing about most mortgage advisors. Their services are free because they get a commission from the selected mortgage provider. A friend of mine recommended this and I am very happy with the service they provided.
Once you meet with the mortgage advisor they will ask some questions about yourself and your income and will help you get an agreement in principle from one of the financial institutions. I got my agreement in principle within a day of submitting my details.
Start viewing houses
Once you have a solicitor and agreement in principle in hand, you can start looking at houses and book viewings. Once you are interested in a house, look at its photos, video walk-through, floor plan, and home report. Especially lookout for the house price in the home report valuation. Your mortgage will only cover this amount. If you are happy with the home report and floor plan, book a viewing. Keep in mind the photos and videos can deceive you. So never buy a house without having an in-person viewing.
It’s very important to be quick about this and book the viewings as soon as possible. The House market moves really fast and sometimes when you request a viewing, the house might be already under offer.
Submit an offer or note of interest
Once you find a house you like, you can submit an offer or a note of interest. This is a hard thing to decide on and depending on your use case and how much you want the house this can vary. Both of these need to happen through your solicitor. So if you find a house you are interested in, you can tell your solicitor and they can submit a note of interest or an offer for you. Note of interest is a simple concept to say to the buyers that you are interested in the house, but not yet committed.
If you are sure you want the house, you can submit an offer. In this case, you can get advice from your solicitor about the amount that you want to put in your offer. You have to keep in mind that your mortgage will only be based on the value in the home report. This means whatever amount you bid over the home report value, you need to have that in cash with you. So you need to have a deposit. Usually, you need at least a 10% deposit. And on top of that the amount you bid over the home report value plus the solicitor fees including the Stamp Duty. Stamp Duty is much higher if this is not your first home. You might also want to factor in the moving and furniture costs with the cash you have available to determine how much you can bid. You can get guidance from your solicitor on how much you need to pay for the stamp duty and fees.
Once you submit an offer/note of interest, few things can occur
House goes to the closing date
In most cases, if a house gets more than two bids/notes of interest, they will put a closing date and time. So all the potential buyers can submit offers. On the day, they will go through all the offers and select one and in most cases, this is the highest offer. This is another tricky scenario, because you want to bid higher, but not too higher. There were times that we missed the houses because the selected offer was less than 5k over ours and the times where the selected offer was more than 50k over ours.
You get a counteroffer
If the house owners already have a number in their mind, they will counter your offer with theirs. In this case, you can either negotiate with them more or accept their offer.
Your offer gets accepted
This is the best-case scenario and rarely happens without closing dates or counteroffers.
Kick-off mortgage and conveyancing processes
Once your offer is accepted, work with your solicitor to finalize the remaining details. It is also a good time to work with your mortgage advisor on your mortgage application. Your solicitor will wait until the mortgage application is accepted and you have set insurance for the property. The process can take multiple weeks. But for me, it happened within dates.
In the meantime, your solicitor will continue looking for title deeds, local authority plans which might affect your property, etc. This is to determine everything is in place and whether any issues are surrounding these areas.
Once your solicitor has all the information like the mortgage offer and concluded the property-related searches, they will work on concluding the missives. After this happened, both the parties are legally bound to the sale.
Then the solicitor will work on the standard security which needs to be signed by you.
Pay your solicitor
Once everything is in place, your solicitor will notify the exact amount that you need to pay. This is your deposit +any amount you offered over the home report value + Stamp duty + fees. They will give secure mechanisms to put your money into their account.
Once your solicitor gets the rest of the money from the mortgage provider, they will transfer this to the seller's solicitor and complete the sale. At this point, the seller's solicitor will release the key to the house. In our case, we just had to go and collect it from the seller's solicitor.
List of documents that we needed
For the first meeting with the mortgage advisor
- Photographic ID ( BRP works )
- Latest 3 months payslips
- Latest 3 months bank statements
- A breakdown of your household costs ( to determine your affordability )
For the meeting to apply for the mortgage
- Proof of Name ( Your BRP works for this )
- Proof of income — Payslips for last three months
- Proof of expenditure — Bank statements of last three months
- Proof of deposit — I got some money from my husband towards the deposit of the house. So for this, we need to provide a letter saying that he is gifting the money and it’s not returnable and he has no interest in the property in return. Along with this we also had to provide his bank statements.
- Proof of address — Council tax bill
Source of Funds for Solicitor
- Salary Slips for the last 3 years for me and my husband ( since the gift deposit is coming from him )
- Bank statements for 2 years
