Defects Scheme for Apartments and Duplexes
Selling a Property
When you have decided to sell a property the process can be equally as stressful as any purchase, especially if you are unfamiliar with the process. You might consider that finding the buyer is the point at which you have managed to sell a property they have managed. This is not quite the case as the following guide sets out.
Step 1 – Going “Sale Agreed”
To sell a property the terms of sale are agreed with your real estate agent. Your agent will request a booking deposit from the purchasers and then send details of the sale to you and your solicitor as well as to the buyers and their solicitors. The booking deposit is not a binding payment at this stage. It reserves the sale for these purchasers until both they and you have signed contracts. It is fully refundable up to this point.
Step 2 – Your title deeds and getting signed contracts
If you hold your title deeds, then you should pass them into your solicitor to enable the sale contracts to be issued. Properties that are subject to a mortgage, will have their deeds held by the bank or building society in question. Your solicitor will need your written authorisation to take up the deeds on your behalf from your bank. Once in receipt of the Deeds your solicitors issue draft contracts containing the following information regarding your sale:
- The agreed purchase price
- The contract deposit to be paid by the purchaser when signing the contract (typically 10% of the sale price)
- The closing date for the sale
- A list of any contents coming with the property, if any.
- Various other information about charges affecting the property (service charge LPT etc.).
The next steps is clearing the pre contract questions required by the Purchaser’s solicitor to confirm that the title, planning and other property matters are in order or to identify issues that must be discussed and agreed prior to the completion of the sale. The purchaser’s solicitors will expect:
- The A BER (Building Energy Rating) Certificate and report must be delivered prior to contract signing
- Proof of payment of the Local Property Tax up to date including the Household Charge
- For properties that were second homes or not the principal private residence of the Vendor between the years 2009 to 2013, proof of payment of the Non Principal Private Residence Charge and a certificate of clearance.
- Proof that the existing mortgage will be cleared from the sale proceeds or if not a letter of consent to the sale from the Lender.
- For properties by deceased’s estate, an office copy Grant of Probate from the Irish Probate office.
- For newly built, renovated or altered properties:
- The planning permission, if permission was needed
- An Architect’s Certificate of Compliance with planning permission
- An Architect’s engineer’s Certificate of Compliance with Building Regulations or proof of registration on the Building Control Management System
- Receipts for payment of any financial contributions required by the planning permission
- For properties in rural areas that require “sight lines”, proof that the sight lines have been granted by your neighbours.
- If no planning was needed (e.g. exempt rear extension), an Architect’s certificate of exemption from planning and compliance with Building Regulations
- For properties in managed estates, the receipt for payment up to date of the service charge or
- A registration maps prepared by an architect for properties that are subject to the formal process of “first registration” or are being carved out of existing lands or properties.
- If the property is serviced by a septic tank, the certificate of registration of the tank with the Local Authority and & copy of the maintenance contract (if any).
- If the property is let:
- A copy of the letting agreement
- Proof of registration of the tenancy with the Residential Tenancies Board
- A rent Statement showing the rent is paid up ot date
Anyone selling a property should be prepared to deliver or organise the above listed items to answer queries if and when they arise. Your solicitor will be available to discuss these with you.
Also note that anyone who is not tax resident in the Republic of Ireland must now have an Irish PPS (tax) number. If you do not have an Irish tax number, you should complete an application as soon as possible.
Your solicitor will apply at this stage for the redemption figure of your mortgage so that you can be advises of the amount necessary form sale proceed to clear existing mortgage. If the property is being sold at a value that is less that the balance of the mortgage and the property is in “negative equity” the Lender’s consent will be required for the sale. There were options in the market place for transfer of outstanding balances to e.g. term loans or onto new properties bring purchased. prior to any sale in this case the first measure should be to address the possibility of sale with the bank. Sellers must be able satisfy a purchaser that the existing mortgage will be released on or after closing.
Step 3 – Signing contacts and exchange
When the contracts and deposit are received from the Purchaser, you will attend with your solicitor to counter sign the sale contract. Your solicitor will most likely require (following obligations under the Money Laundering Regulations):
- Your ID Verification (copy of your passport, driver’s licence or Immigration Bureau ID card)
- Your Address verification – typically a utility (ESB, Gas, phone) bill with your name at that address.
Prior to your signing your solicitor will:
- Review and advise you on the settled terms of contract and closing date to confirm with these details with you, including matter such as the final contents list
- Talk you through the logistics of closing on the contract date.
- Confirm the redemption figures for your mortgage.
Once everything is confirmed, the contracts will be countersigned by you with the closing documentation. One part of contract is then sent back and at that point formal and legal exchange is completed. The contract is now binding on all parties at the price in the contract, for completion on the closing date set in the contract.
Step 4 – Get ready for closing
With the return of contracts, your solicitor will work to preparations for completion. The final account will be prepared, if tax account or service charge arrears must be discharged you will be advised to complete this exercise. The redemption figures will be confirmed for the closing date. Your solicitor will complete post contract formalities with the Purchaser solicitors.
In advance of closing a seller must be organised for the removal of contents and moveable items from the property that are not included in the sale (furniture, white goods, personal effects etc.). Normally sales involve the handover of “vacant possession” on closing.
Step 5 – Closing the sale
Your solicitor will guide you through the arrangements on the day of closing. The balance of the contract price will be received by your solicitor and the deeds delivered to the Purchaser. The purchaser’s solicitor will complete final inspection of title, closing documents and public registry searches on title. once everything is confirmed and in order, the money is authorised for release to you as Vendor and keys are released to the Purchaser. The property is now sold. The property must be vacant and ready for handover.
Step 6 – After the closing
Once the property is sold and funds are released your solicitor will immediately redeem your mortgage and organise the bank to discharge it from the title. A formal cash account detailing the payments received and made is completed and delivered to you. Where net proceeds are available, they are paid to your designated bank account.
Capital Gains Tax is usually levied on the sale proceeds of second homes. There is no CGT on your family home/primary residence. If payable, payment must be filed and made to the Irish Revenue Commissioners by the liability deadline (typically October 31st or January 31st, depending on closing date). You should have your accountant deal with this.
Seller who are not tax resident in Ireland may be obliged to deal with the issue of Capital Gains Tax prior to closing and your solicitor will have to organise payment from the sale proceeds. Your accountant can advise you and your legal adviser of the necessary amount for payment of CGT.
There are a number of components to sale transaction that require the oversight and assistance of experienced legal professionals. Members of the Abacus Legal network act extensively in the sale and remortgage of residential property in Ireland. They are chosen for their considerable expertise and proven track record in this area. The rates are very competitive, transparent and agreed at the outset. Their focus at all times is to maximise the benefit of any sale whilst minimising the stress. We are connected with professionals in your area ready to assist you now.
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