If you’re going to buy a property in Scotland, you may have many questions for your estate agent like: Can I withdraw my offer on a property after it has been accepted? It is important you ask your solicitor and get in touch with conveyancing solicitors before you are buying a house and making a purchase in Scotland. In this blog, we will discuss what happens in case you need to withdraw a formal offer before your complete the purchase.
Can you withdraw your offer after the offer is accepted?
A common misconception about Scottish law is that once your offer to purchase a home is accepted, the transaction is at least finalized. Both the buyer and the seller can be confident that the deal will go through.
But what if you change your mind about purchasing? Do you have to proceed with the purchase nonetheless? The answer is that it doesn’t always depend; it depends on how far along the transaction is.
It is not generally the case that accepting an offer creates a binding contract then and there.
Standard conditions will be added to the offer that your solicitor presents on your behalf, requiring the seller to furnish details like ownership evidence. In response, the seller’s attorney would typically provide a “qualified” acceptance, which may address practical matters like changing the entry date and defining which moveable property items (such as drapes) are included in the purchase price. Additionally, it might require your lawyer to confirm a number of things, like local authority approvals for changes, and it might also include additional items.
You are not obligated to purchase legally at this point because there is no contract in existence. The seller’s lawyer will be required to provide a number of “searches” that will allow your lawyer to verify that the seller has the legal right to sell the property, to see if the deeds contain any title conditions that might restrict what you can do with the property, and to review data from the relevant local authority on a variety of issues like planning applications affecting the property and whether the property is listed.
Your lawyer might be waiting for your mortgage lender to make a loan offer while all of this is going on.
You won’t be prepared to “Conclude Missives” until your solicitor is satisfied with the searches, you’ve agreed to all outstanding details like the entrance date, and your solicitor is confident that the finance is in place. A legally binding contract takes effect at this point.
Once a contract is in place, you cannot pull out of the purchase without incurring significant financial penalties.
In reality, a buyer pulling out at this point is almost unheard of, but if you did, the seller would expect you to cover the costs of re-marketing the property, any discrepancy between your offer and the one they ultimately accept, and any costs associated with any alternative financing the seller may need to obtain to finance a purchase they committed to on the basis of the sale of their home to you.
But just because you have the legal right to back out of a purchase before the exchange of letters, doesn’t imply you should.
When a seller’s solicitor accepts an offer, they do so on the understanding that your solicitor is vouching for you, confirming that you are a real buyer and have the cash required to proceed with the transaction. If it turns out that’s not the case, the seller’s solicitor will no longer be able to rely on the offers that your solicitor has submitted. Since solicitors understandably don’t want to be in that position, if you back out of a purchase, they might hesitate to make an offer on another home on your behalf.
Your solicitor will recognise that your circumstances have changed if you have a really pressing reason for altering your mind, such as a major illness or the loss of your employment. However, your lawyer will probably not want to represent you again if you decide that you have just changed your mind.
In general, solicitors will aim to Conclude Missives well in advance of the entry date whenever possible.
According to the Law Society of Scotland’s professional rules, solicitors for both the buyer and the seller must “conclude missives without undue delay.” ‘Undue’ has a rather ambiguous term in this context, as it so happens. You won’t be committed to a purchase by your solicitor until all required checks have been completed and you are ready to proceed. For instance, until you were certain that your mortgage was in place, you would not want to Conclude Missives.
Missives may not have been ended because you haven’t sold your present property, which is probably the most frequent reason. Consequently, it is very feasible for missives to be finished just a day or so before you are scheduled to move in. However, if there is a delay, your lawyer must let the seller know about it; you can’t expect your lawyer to keep the seller in the dark without providing the seller with a good reason for the delay.
As you will appreciate, not concluding missives creates uncertainty for both you, the buyer, and the seller.
Although it is technically still possible for both parties to change their minds at this point, it is almost always difficult to wait between an offer being accepted and missives being completed. However, there is a strong tendency to proceed rather than back down, ensuring that the majority of deals are successful and that offers are often withdrawn only when there has been a material change in the purchasers’ circumstances.
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