Back on the Property Ladder

A couple of months ago, we decided to start looking for a house in Edinburgh. As you might expect, the purchasing process is different from what I’d experienced in the U.S.

First of all, estate agents here don’t do as much work as they do in the U.S. I'm sure it's partly because Scottish agents only make 1-2½% of the purchase price compared to 4-6% in the U.S., but most of the time, U.S. agents have to split their commission with the buyer's agent, so the discrepancy isn’t as large as you might think. They also handle all the paperwork because, unlike the U.K., solicitors are not required for property transactions.

When I was looking to buy a house in California, I called an agent, gave her a list of search criteria (price, number of bedrooms, location and any other must-haves) and over the course of several weeks, she drove me around to the various properties she had found. Since the concept of a buyer’s agent doesn't exist here, the only properties an agent will show a potential buyer are the ones that are listed by the company he works for, which is a tiny fraction of what's on the market.

Without an agent, buyers are left to locate properties and arrange viewings themselves. In addition to individual appointments, most sellers hold regular open houses on Thursday evenings and Sunday afternoons. The interesting thing is, if the seller is living in the house, he has to show it himself. If I were an agent, I'd think twice before allowing the seller to chat to the buyer. More than once, we had people tell us how desperate they were to sell their properties.

I found two websites to be really useful during my search. www.espc.com has a comprehensive list of Scottish properties for sale and is user-friendly. The My Pages feature is handy for saving details on properties you want to revisit. Once you're thinking about making an offer, www.nethouseprices.com tells you how much the seller paid for their property. Final selling prices are also available for England and Wales.

Another difference is the “Offers Over” scenario, which happens in England and Wales as well. When you see a property listed for “Offers Over £200,000,” it means the seller has a price in mind that is an unknown percentage above the £200K mark, but he’s decided not to inform the buyers. Interested buyers can either put in a Note of Interest to the agent or make an offer, at which point the seller may or may not accept it. Once the seller receives two Notes of Interest, a closing date will be set for the interested parties to get their offers in. An agent told me the Offers Over came about because solicitors didn’t want to be held responsible by the seller for setting the price too low or too high. With Offers Over, the seller is confident he received the most he could get for his property in a given market.

From a buyer’s perspective, it’s a very annoying and confusing process, which is why sellers who are having trouble getting interest will sometimes switch to a set price. Many new homes are now starting with a set price to encourage buyers to make an offer.

Once an offer is accepted, the buyer’s and seller’s solicitors exchange Missives, which means they are ironing out the fine points of the contract. When Missives are concluded, the deal is finalized. In England and Wales, there is also something called Gazumping. http://observer.guardian.co.uk/uk_news/story/0,,684075,00.html Gazumping is when a seller accepts an offer from one interested party, only to accept a higher offer later on from someone else. Unlike Scotland, an accepted offer from a buyer isn’t legally binding.

After three months of searching, we decided on a three-bedroom flat in Leith, which is an up-and-coming area about 10 minutes from the city center. Here are some good pictures of the area: http://www.doughoughton.com/webpage/page/page040.html

This is Britannia Quay, where we purchased our flat. I know this isn’t a very interesting shot, but I’ll post interior photos as we get the rooms painted and furnished.