Can I change my mind about buying a property I’ve made an offer on?
There is a widespread belief that, in Scottish law, if your offer to buy a property is accepted, the deal is done – if not dusted. Both buyer and seller can be sure that the transaction will go ahead.
But what if you have second thoughts about buying? Are you still obliged to go ahead with the purchase? To which the answer is; not necessarily, it depends on how far the transaction has progressed.
It is not generally the case that accepting an offer creates a binding contract then and there.
When your solicitor submits an offer on your behalf, he or she will include standard conditions in it that require the seller to provide certain information such as proof of ownership. In reply, the seller’s solicitor will normally issue a ‘qualified’ acceptance which may deal with practical issues such as amending the entry date and what moveable items in the property (e.g. curtains) are included in the price. It may also enclose various items and ask your solicitor to satisfy themselves on various items e.g. local authority permissions for alterations.
At this stage, there is no contract in place and you are not legally committed to the purchase. The seller’s solicitor will be expected to provide a number of ‘searches’ that will enable your solicitor to confirm that the seller has the legal right to sell the property, to check whether the deeds include an any title conditions that might limit what you can do with the property and to review information from the relevant local authority on numerous issues such as planning applications affecting the property and whether the property is listed.
While all this is happening, your solicitor may also be waiting on your mortgage lender issuing an offer of loan.
Only when your solicitor is satisfied with the searches and you have agreed all the outstanding items such as the entry date and your solicitor is satisfied that the funding is in place will you be ready to ‘Conclude Missives’. This is the point at which a binding contract comes into effect.
Once a contract is in place, you cannot pull out of the purchase without incurring significant financial penalties.
In practise, it is almost unheard of for a buyer to pull out at this stage, but if you did, the seller would expect you to pay for the cost of re-marketing the property, any difference between your offer and the offer they subsequently accept and the costs of any alternative finance the seller has to take out to fund a purchase they committed to on the strength of the sale of their house to you.
Just because you are technically free to withdraw from a purchase before missives are concluded, however, that doesn’t mean that you can do so on a whim.
When a seller’s solicitor accepts an offer, they do so on the basis that your solicitor is vouching for you – that you are a genuine buyer and have the funds necessary to go ahead with the purchase. If it turns out that that is not the case, the seller’s solicitor can no longer trust offers submitted by your solicitor. Understandably, solicitors don’t want to be placed in that situation and that’s why – if you withdraw from a purchase – your solicitor might decline to submit an offer for you for another property.
Of course, if you have a very pressing reason for changing your mind – a serious illness or the loss of your job – your solicitor will understand that your circumstances have changed. But if you decide that, after all, you have just changed your mind, your solicitor will probably not want to act for you again.
In general, solicitors will aim to Conclude Missives well in advance of the entry date whenever possible.
The professional standards set by the Law Society of Scotland requires solicitors for buyer and seller alike to ‘conclude missives without undue delay.’ As it happens ‘undue’ here has a very flexible definition. Your solicitor won’t commit you to a purchase until all the necessary checks have been completed and you are ready to go ahead. For example, you would not want to Conclude Missives until you knew that your mortgage was in place.
Perhaps the most common reason for not concluding missives is that you have yet to sell your current property which is why it is perfectly possible for missives to be concluded only a day or so before you are due to move in. But if there is a delay, your solicitor is required to inform the seller that that is the case – you can’t expect your solicitor to keep the seller in the dark without giving the seller a proper explanation for the delay.
As you will appreciate, not concluding missives creates uncertainty for both you, the buyer, and the seller.
The uncertainty between an offer being accepted and missives being concluded is almost always stressful but, technically, both parties can change their mind at this point.. But there is a strong bias in favour of going ahead which ensures that most transactions are successful and that offers are generally only withdrawn if there has been a significant change in the buyers’ circumstances.
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