STEPS IN PURCHASING A PROPERTY
For many purchasers the first step will be securing the finance necessary to purchase your new home. The traditional route for financing a property purchase is by obtaining a mortgage through a bank, however there are now more options available. Finance can now be obtained through a Credit Unions or your local County Council. While mortgage lending from your local County Council is nothing new, the introduction of the Rebuilding Ireland Home Loan scheme in 2018 can be a more attractive option. For further information about this scheme you can get in touch with the finance department of your local County Council or visits the scheme’s website here.
It is recommended that you first obtain your letter of approval in principal before you begin your property search, as this will help you go sale agreed faster when you have found your property.
Finding your new property
The first question you may ask yourself is whether you will be looking for a new build or a second hand home. If you are deciding on a new build, the Help to Buy scheme can help first time buyers with their saving for a deposit. First time buyers can claim up to 5% of the purchase price to a maximum of €20,000.00 in a tax rebate. Further information please follow the link to Revenue’s website here.
The traditional route for purchasing a property has been through auctioneers. With websites such as Daft and My Home, this is the first port of call for many when beginning to look through properties. Equally there is a growing number of online property auctions, which can make the whole process of purchasing a property more streamlined. There can be many advantages to buying a property through online auction, however it would be recommended that you purchase your property through a private treaty sale, as when you buy at auction there is no room for negotiations after your bid has been accepted.
There is also a growing number of Vendors who forego using an auctioneer to sell their property and instead opt to sell the property themselves. While generally this is nothing to be concerned about, it is recommended that you do not pay any money directly to the Vendor and instead through your solicitor contact the solicitor for the Vendor in order to pay a deposit. Money which is paid to another solicitor is sent on trust pending the completion of the sale and elevates any possibility of fraud on the part of the Vendor.
Once you have gone sale agreed, it is recommended that you have an engineer inspect the property for any structural defects. At this stage there is no binding agreement in place and if any structural defects are found, you are entitled to back out of the sale. Equally any minor defects discovered can be used a point of negotiation against the purchase price.
The legal part
Once you have gone sale agreed on a property, a booking deposit is then paid over to the auctioneer. The booking deposit is usually €5,000.00 but can also be a % of the purchase price. A booking deposit is refundable if you decide to change your mind later. If you have already engaged a solicitor, you can give their details to the auctioneer who in turn will be in contact with them.
The Vendor’s solicitor will then issue Contracts of Sale to your solicitor, who will then will complete a title review and review any special conditions attached to the sale. If all is in order your solicitor will then invite you to sign the Contracts of Sale and a contract deposit of 10% of the purchase price will be returned to the Vendor’s solicitor. It is at this point that a binding contract is in place and generally the parties cannot break it except in very limited circumstances.
After the Contracts of Sale have been exchanged, your solicitor will arrange for the draw down of the mortgage and complete background searches against the property and the Vendor. Again if all is in order, your solicitor will transfer the remaining balance of the purchase price and the Vendor’s solicitor will release the keys to the property. Your solicitor will provide you with the closing date in advance and it is this date that you should arrange to have house and content insurance in place. Indeed for mortgage lending, your finance provider will make this a requirement before the loan can be drawn down.
Final steps to owning your property
After the sale has closed and you have take possession of your new home, your solicitor will complete the registration of ownership. The first step in this will be to have the Deed of Transfer stamped, which is at a cost of 1% of the purchase price. Once the Stamp Duty certificate has issued, you solicitor will then lodge an application with the Land Registry to register you as the new owner. If you have taken out a mortgage, they will also register this mortgage as burden on the Title. Again if you have taken out a mortgage, the Title Deeds to the property will be returned to the finance provider. If you have not taken out a mortgage, your solicitor can retain the Title Deeds in their office or can release them to you.
It is difficult to say how long each individual transaction will take to complete, however in a straight forward transaction you can expect to have the keys to your new home in about 6 – 8 weeks of going sale agreed. Delays can arises when drawing down a mortgage and that is why it is important to have all the work in this regard completed before you go sale agreed on a property.
The above is a general overview of a property transaction and is not intended to be legal advice. If you have any queries or would like to know more, please feel free to contact us through our website here. We offer a free no obligation quote and provide a nationwide property service at no additional cost.