The property market can be overwhelming, filled with jargon and complicated processes guaranteed to befuddle first-time buyers and seasoned veterans alike. Our detailed Property Buying Guide aims to demystify the industry to give you the tools to confidently find and purchase your next dream home (and even save some money, too).
In the latest instalment of our buying guide, we’ll be taking a look at Notes of Interest. Namely, what a Note of Interest is, the legal effects of doing so in Scotland and how to submit one for a property that takes your fancy. Let’s dive in.
What Is a Note of Interest?
Submitting a Note of Interest is how you show a seller you’re interested in purchasing their home. It’s typically done through your solicitor, who informs the seller’s solicitor or estate agent, depending on who is handling the sale. Ideally, submitting a Note of Interest will ensure that you get the opportunity to make an offer on the property before it’s sold to someone else.
Does A Note of Interest Guarantee Me the Chance to Make an Offer?
The Law Society of Scotland has strict rules about how solicitors should handle Notes of Interest and ensures they inform their selling clients as and when they receive them. However, these regulations only apply to solicitors, meaning if the seller is using a non-solicitor estate agent, they won’t be bound by this code of conduct.
Regardless, a Note of Interest is not legally binding, meaning there’s no guarantee a property won’t be sold before you can make an offer. If the seller wishes to sell their home to another buyer, they are fully within their right to do so, even if several parties have submitted Notes of Interest.
That being said, it’s worth mentioning that the more Notes of Interest a property receives, the more likely it is that the sale will go to a Closing Date (more on that below), as the seller may get a better price for their home by allowing interested parties to bid for it.
What Happens Once You Submit a Note of Interest?
If the seller accepts your Note of Interest, they may decide to set a Closing Date. This is a date by which all interested parties must submit their offers to buy the property in order to be considered.
If a seller chooses to set a Closing Date, the Law Society of Scotland dictates that their solicitor must inform all parties who submitted a Note of Interest. They will be invited to make an offer in writing, typically via their solicitor, and will not be privy to the other potential buyers’ bids.
As previously mentioned, the more Notes of Interest a property has, the bigger its perceived competition is. Closing Dates can lead to some buyers bidding far more than they would have offered to secure the property, including over and above the Home Report Valuation at sale.
How Do I Submit a Note of Interest?
We recommend submitting a Note of Interest through your solicitor, especially if a solicitor-estate agency firm handles the sale, as you’re more likely to be taken seriously as a potential buyer. Moreover, if a Closing Date is set, you’ll already have access to a legal professional who can assist and advise you throughout the process.
Technically, you can submit a Note of Interest on your own behalf, but many firms will insist on receiving your Note of Interest via a solicitor.
Am I Legally Bound to Making an Offer if I Submit a Note of Interest?
Submitting a Note of Interest does not legally bind you or the seller to anything. You can submit a Note of Interest and choose not to make an offer on the property if you change your mind, with zero repercussions. Similarly, a seller is under no legal obligation to go to a Closing Date because you submitted a Note of Interest – they may accept an offer or sell to someone else at any time.
Do I Have to Submit a Note of Interest if I Like a Property?
While you don’t necessarily have to submit a Note of Interest for a property in order to make an offer, we recommend going through the official channels to let the seller know you’re keen. This way, you’re more likely to get the opportunity to make a bid and will be contacted about any movement on the sale, such as a Closing Date.
Typically, solicitors won’t charge you to make a Note of Interest on your behalf, so it’s always worth throwing your hat in the ring when you find a home you love.
So, You’ve Submitted a Note of Interest. What’s Next?
If you’ve submitted a Note of Interest for a property and a Closing Date has been set, it’s time to make an offer. In the next instalment of the Property Buying Guide, we’ll take you through everything you need to know about the process, including how it works, how to make a bid and the legalities to consider before you take the plunge.
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