Buying a Property
It is well known that buying residential property can not only be complex to those who are not familiar with what is involved but is also one of the most stressful things to do. The support, advice and guidance from an experienced professional is therefore not only key to a successful transaction but will ease the normal worries that arise during the course of purchase.
Solicitors with the right expertise and experience can spot potential issues before they arise. They can deal with the stress of making sure loan funds are ready for your closing date. They can answer your questions and deal with your concerns. Our panel of solicitors meet the highest standards of property law experts in Ireland. They have been carefully selected for their track record in residential conveyancing.
1. Think about what you are buying
When asked about why buyer bought a home or rental property a number of considerations commonly come up, such as:
- Can I sell it for what I bought it for or more?
- What about the location, amenities, nearby schools and transport? Bear in mind that eligibility for local schools is often determined by your properties location in the same church parish. A townland bearing the same name may not qualify for entry into the local school
- What about garden aspect to the sun?
- Does the property come with Homebond scheme cover or another structural guarantee?
- For rental properties, what is the rental demand and rental levels in the area like?
- What mortgage can I get to purchase? How much will the repayments be and will the rents available in the local area cover the mortgage repayments?
- Managed estates are liable to service charge. What is the level of the service charge and what does it cover (e.g. refuse collection)?
- What is the BER (Building Energy Rating)?
- What about local area flooding. Is there any risk?
- Answering these questions honestly will help you with the important decision about whether to buy and which property, especially if a mortgage is needed to purchase.
2. Taking the next step
With your decision to buy, you can bid on the properties of interest to you. Once successful you will be asked to pay a booking deposit to the sales agent. The agent will hold this money until the completion of the purchase, and this will reserve this property for purchase by you. The booking deposit is fully refundable until you have signed and exchanged the contracts in the purchase. When the agent receives this initial deposit, he or she will set out the terms of sale to all parties at which point the solicitors for the Vendor will issue the out draft purchase contracts.
If you are prepared as a purchaser you will already have started the process of mortgage approval with a bank or building society. This informs you of the purchase price you can afford to pay. When you are approved and the property has been reserved for you, you then organise the loan approval or facility letter from the Bank. This confirms the amount of the mortgage that you have available to you and the terms on which it is given i.e., the loan term, the rate of interest, variable rate or fixed etc. the bank will also seek the bank the name of the solicitors acting for you. The objective to have the bank send over the “loan pack” to your solicitors around the same time as the draft contracts are received.
New business mortgages often come with reduced introductory fixed rates i.e. the rate and therefore the repayment amount is fixed for an agreed period of time. What is important to realise in agreeing the fixed term is that any redemption of change in the original loan during this period can result in a bank penalty being applied by the Lender for redemption within the fixed rate period.
3. The Contract Process
Your solicitor will complete a thorough investigation on title prior to advising you that contracts are ready to sign. Once the loan offer and loan pack are received and investigations are complete, you will attend the office sign the purchase contract and loan documentation. You will be required usually to bring the following with you:
- ID Verification (copy of your passport, driver’s licence or Immigration Bureau ID card)
- Address verification – typically a utility (ESB, Gas, phone) bill with your name at that address.
- The balance of 10% deposit to be paid by you on signing the contracts. You solicitor will advise as to how this is to be done.
At your meeting with your solicitor:
- The contract will be reviewed to make sure it is correct in all respects with your agreement (e.g. are any or all contents included).
- All relevant matters of title will be discussed with you such as planning permission, confirming the property boundaries, the obligations of ownership.
- Advise you on relevant taxes and charges such as service charges and Local Property tax.
- Have you review and approve the specification for a new property if you have not already seen it
- Discuss the results of your structural survey of any second hand property, if this has any bearing on your purchase
- Discuss the impact of Management Companies on your ownership and how to deal with issues that may arise
- You will all review the mortgage offer to confirm it is the correct offer letter. Your solicitor will advise you of the date by which it must be accepted and how long it stays valid for. You will also discuss the preconditions to drawdown of your mortgage.
- You will be advised on the completion process and items which you will be required to organise.
Once everything is correct and in accordance with your understanding of the agreed terms of purchase, you will sign the contracts and the loan documents. Payment of the balance deposit of 10% will be required at this stage. When contracts are countersigned by the Vendor and sent back, this is formal contract exchange. This is the point at which you are bound at the price in the contract, for completion on the contract closing date.
4. Getting ready for completion
After formal exchange your solicitor will work with the bank to ensure that the loan funds will be available for the agreed closing date.
During this time you will be expected to have in place with your lender items listed int eh conditions to your letter of offer, including:
- Life cover/Mortgage Protection – an insurance policy designed to cover the repayment in full of your mortgage in event of your death.
- Structural Property Insurance/ Fire Cover in the amount of the re-build cost (not the open market value) of the property in the event of destruction by e.g. fire.
- The obligations of a mortgagor (purchaser) are to maintain both the insurances for the duration of the mortgage.
Prior to the closing date your solicitor will advise you of the amount needed to complete the purchase, including the mortgage costs such as stamp duty and registration fees. You must have these funds in place and transferred to your solicitor to be ready for the closing date.
5. Your new home – getting your keys
On the closing date your solicitor will pay the balance of the purchase money, complete final checks on the title and ensure all accounts such as Local property Tax and services are paid up to date. When everything is correct for closing, keys are released. At this point in time the property is yours.
6. Once you own the property
After closing you will ned to sign your purchase deed. Your solicitor will pay Government Stamp Duty on your behalf (currently 1% or 2% depending on value) and organise the registration of your legal ownership in the Government Registry. You will be notified on completion of registration. Where you have bought with a mortgage, the Deeds are sent to your bank where they will be held by it for the term of the mortgage. If you are a cash purchaser, you may take possession of your own Deeds.
The Abacus Legal family
Our panel of local expert solicitors are ready to guide you through the complex process of buying a property, to assist and advise and minimise the stress of purchase for you. Purchasers need skill, care, determination and expertise. Choosing one of our established professionals is the proven way to achieve this balance. We have someone in your area.
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