To any buyers or sellers who are new to the Scottish property market, they will quickly be introduced to the concept of ‘concluded Missives’ or ‘conclusion of Missives’. The importance of conclusion of Missives cannot be underestimated as it has serious legal, and practical, implications for property buyers and sellers. Although it can be a bit confusing at first, we’ll try to demystify the terminology and its impact in this article.
What Are Missives?
‘Missives’ is an old word for letters. Missives are the contractual letters that are exchanged between the solicitors of a property buyer and seller in Scotland. These letters contain all of the important details of the sale (or purchase, depending on what side you are on!). In spite of technological advances in recent years, Missives are still printed, given ‘wet signatures’ and witnessed then sent by post between the parties’ solicitors.
Missives start with the buyer’s Offer to purchase the property. Thereafter, the seller’s solicitor will usually issue a ‘Qualified Acceptance’. This letter accepts the original Offer, but subject to further conditions. After this, there can be a number of further Qualified Acceptances by both parties. The advent of email has thankfully reduced the necessity for multiple Qualified Acceptance letters because electronic communication between parties to agree the finer details of the contract is so much easier. The final letter in the process is the Concluding Missive which accepts all of the previous qualifications and holds the Missives as ‘concluded’.
What is the Importance of Concluded Missives?
Quite simply, until Missives are concluded, there is no binding contract of sale (or purchase) of the property. This means that either party is at liberty to pull out of the proposed sale, even though the parties have verbally agreed the main details of the sale and purchase.
How Long Do Missives Take to Conclude?
On average Missives take at least 6 weeks to conclude. However, this can vary dramatically from case to case.
One of the main barriers to conclusion of Missives is that most buyers’ solicitors will not be prepared to conclude Missives until they have received an official Offer of Loan from the buyer’s lender, assuming the buyer is purchasing with a mortgage. The speed at which lenders get these Offers out to solicitors varies greatly and some are a lot better than others.
Another delaying factor can be the buyer’s inability to secure the finance that they believed they were going to use to purchase the property. Often, a buyer will have obtained an Agreement in Principle from a mortgage lender and believe that they have ‘finance in place’. However, until the Offer has been verbally accepted, the buyer or their mortgage adviser is unable to submit the full mortgage application. At this stage, it’s not uncommon for the lender to ask for further paperwork in support of the mortgage application and, sometimes, for the buyer to be unable to provide this. In other cases, the buyer’s original lender will be unable to lend on the specific type of property that the buyer has finally secured (for example, some lenders will not lend on properties located above hot food outlets). Whilst the buyer seeks alternative financing options and awaits the Offer of Loan, their solicitor will be unable to conclude Missives.
Initial negotiations of an Offer will tend to focus on the ‘headline’ points of the purchase; the price, the Date of Entry and any movables that are to be included in the sale. However, it’s only when the conveyancing process begins that other issues can come out of the woodwork and hold up proceedings. These could be the buyer asking to see specialist reports on issues such as damp or the condition of the roof. Other common requests will be the buyer’s solicitor wanting to know when any alterations were done and whether the current property owner has gone through the correct process before making alterations. Until the buyer’s solicitor is satisfied that they have the correct paperwork, they may not conclude Missives.
Finally, with the implementation of the Fourth Money Laundering Directive in 2017, solicitors are under increasing levels of scrutiny when it comes to the anti-money laundering documentation that they must gather from their clients and then analyse. Many solicitors will not conclude Missives until they have completed their anti-money laundering and ‘Know Your Client’ checks as well as satisfied themselves about the source of funds being used for the purchase. This process can be time-consuming and is all the more so where there are multiple sellers or buyers, especially where any of the clients are based overseas. Increasingly, conclusion of Missives is being delayed by the difficulties of gathering all of this documentation.
What Should I Wait to Do Until After Missives Have Concluded?
Before you book your removal van, hold your horses! It’s very tempting to get a head start on the moving process as soon as your Offer has been accepted or you’ve received an Offer. However, if Missives aren’t concluded in the time frame everyone expected, the likely result will be that the Date of Entry will be pushed back or, worse, they may not conclude at all. You don’t want to be left in a situation where you’ve booked a moving van to have to cancel it at huge expense. If you are going to book anything, make sure that any deposits or payments are entirely refundable.
You also won’t want to buy brand new furniture for your new home as you don’t want to be left out of pocket or with nowhere to store a new three piece suite.
Finally, if you’re involved in a ‘chain’, you won’t want to conclude Missives on your purchase until you are sure that your sale contract is binding too. It’s not uncommon that the sale of your existing property is progressing smoothly but you hit some snags in concluding Missives on the property that you are buying or vice versa. Generally, your solicitor will not conclude Missives on the property you are purchasing until the Missives are concluded on your sale. This can be a stressful time as the seller of the property that you are buying will be getting restless and want Missives to be concluded as soon as possible. It’s even worse where they too are buying another property, extending the ‘chain’. Whilst it’s inconvenient, remember that it’s possible to move into temporary accommodation or, in some cases, to live with family for a week to avoid the ‘chain’ breaking down and to ensure that you can eventually move into your dream home.
What Can You Do to Help Missives Conclude Quickly?
In a seller’s market, properties can sell quickly and you may find yourself with less time than you would have otherwise hoped to get the paperwork together. If you are a seller and have any concerns about any of the issues outlined above that can delay conclusion of Missives, it can be worth having a chat with your solicitor in advance of your property going on the market. If you are a buyer, it’s again worth having this chat before you get too far into your property search.
If you have made any alterations to your property whilst you have owned it, check that you have all of the necessary paperwork to hand. If you don’t, start gathering this or trying to secure the necessary certificates as soon as you can.
When it comes to ID, make sure that you have your Marriage Certificate to hand if your passport is in a different name to the name that you go by now. Also make sure that, as soon as your solicitor requests your identification documents, you do this as quickly as possible. It’s easy to leave it for another day and find yourself rushing at the last minute to allow your solicitor to conclude Missives for your sale or purchase.
If you are a buyer and want to be sure that your mortgage paperwork won’t delay the conclusion of your missives, it’s recommended that you speak to an expert mortgage adviser. Whilst it’s tempting to surf the best mortgage deals from the comfort of your home, a good independent mortgage adviser will be able to guide you as to who is the best lender for you and for the sort of property that you want to buy. If you know for sure that you want to buy a property above a block of shops and there is only one lender who is offering a mortgage within your monthly payments budget but that lender won’t lend on properties near a licensed premises, it’s better to know that at the outset rather than several weeks into your proposed purchase.
Remember that, until Missives are concluded there is no binding contract and that the buyer or seller can withdraw from the sale or purchase. Try to remain calm, maintain clear lines of communication with your solicitor throughout the sale or purchase and ensure that you have done everything that you can to have all of the necessary paperwork to hand.
If you would like further advice about the missives process, please do get in touch with us by calling 0131 202 5444 (Option 1) or by emailing [email protected].
To avoid any delays due to your mortgage, get in touch with MOV8 Financial, Independent Mortgage Advisers who will be delighted to help with all of your mortgage requirements and queries. To get in touch, just email [email protected] or call 0131 603 4555, today.