The position in Scotland under Scottish law is that the contract is generally concluded at a much earlier stage, and the initial offer, once accepted by the seller, is legally binding. This results in a system of conveyancing where buyers get their survey done before making a bid through their solicitor to the seller’s solicitor. If there is competing interest for a property, sellers will normally set a closing date for the initial offers.
The contract usually consists of an exchange of letters between the solicitors on behalf of each of the seller and purchaser, called missives. Once all the terms of the contract are agreed, the missives are said to be concluded, and there is then a binding contract for the sale of the property.
Normally the contract is conditional upon matters such as the sellers being able, before completion of the transaction, to prove that they have good title to the property and to exhibit clear searches from the property registers and the local authority.
The fact that there is a binding contract at a relatively early stage, compared with the normal practice in England and Wales, makes the problem of gazumping a rarity. The disadvantage for the buyer is that they usually have to bear the cost of the survey for unsuccessful bids, though trials have been made of a system where the seller arranges for one survey available to all bidders.
From 1 December 2008 properties for sale will have to be marketed with information, now branded as the ‘Home Report’. This is a pack of three documents: a Single Survey, an Energy Report & a Property Questionnaire. The Home Report will be made available on request to prospective buyers of the home. The date of final settlement (the “completion date” in England) is in Scotland known as the “entry date”.