Buying a House
Posted by Higgins O Reilly on July 10 2013 @ 12:27
Find out what you can afford
It is important to evaluate all costs involved in buying a home, for example, mortgage costs, legal fees, registration of deeds and stamp duty. If you have calculated that you can afford to buy a property taking into account all of these costs, then you are ready to buy.
Get a solicitor
Conveyancing is the legal work involved in buying or selling property. Conveyancing charges can vary between solicitors, so it is worth contacting several solicitors to compare prices. You can use the Law Society’s website to find a solicitor in your area.
Find a property you like and can afford
Property websites, auctioneers and estate agents are the main ways of finding property for sale. There is a public register of auctioneers and estate agents on the website of the Property Services Regulatory Authority.
Sometimes individual sellers advertise their property themselves Newspapers may also have property supplements or publish advertisements for properties for sale.
Since September 2012, the Property Services Regulatory Authority publishes a Residential Property Price Register. It contains information on residential properties bought in Ireland since 1 January 2010. You can check the register to see what price was paid for a property if it was sold since 1 January 2010.
All homes for sale must have a Building Energy Rating (BER). A BER will inform you how energy-efficient the home is. It will help you make an informed choice when comparing properties. It also offers guidance on steps that can be taken to improve the energy efficiency of a property.
The Radiological Protection Institute of Ireland recommends that you check whether the home is in a High Radon Area on its Radon Risk Map and enquire as to whether the home has been tested for radon. More information on radon in homes is available from the Radiological Protection Institute of Ireland and in our document on measurement of radon levels.
Get a survey
A seller is under no obligation to disclose defects in a property. You should get a survey of the property to find out if there are any defects before finalising the purchase. The Society of Chartered Surveyors Ireland (SCSI) is the professional body for chartered surveyors.
Get mortgage approval
Very few people can buy a home without getting a mortgage. A mortgage is a long-term loan secured against the property you buy. This means if you don’t repay your mortgage you may lose your home.
There are different types of mortgages and different mortgage providers. Contact a number of different mortgage providers to find out who can offer you the best deal. More information on mortgages and choosing the best one for you is available on the National Consumer Agency’s website.
You can get mortgage approval in principle before you start to look for a property; this will let you know how much you have to spend. However, when you find a property you like, you must get formal mortgage approval before you sign the contract for sale (see below). If you sign a contract for sale and subsequently don’t get mortgage approval, you will lose your deposit and there may be other penalties.
How to buy the property you want
The two most popular methods by which properties are purchased and sold are:
• Private treaty sales
• Public auction
Private treaty sale
A private treaty sale is where the property is not put into an auction. You can contact the seller or the seller’s agent, usually an estate agent, to agree a purchase price.
If there is an estate agent involved, once you have agreed to buy the property you may be required to pay a booking deposit to the estate agent. The legal process to buy the property may only start when the estate agent receives your booking deposit. This deposit is refundable up to the signing of the contract for sale (see below).
Your mortgage provider will give you formal mortgage approval and issue you with a loan pack. You will need to have mortgage protection insurance and home insurance. You can organise these with your mortgage provider but it is advisable to shop around. When your solicitor has checked the contract for sale, you will sign it and pay a deposit (less any booking fee).
Notice of the date and time of the auction is usually advertised in a local newspaper, estate agent or by a sign on the property. A reserve figure is set for the property, usually by the seller or the auctioneer. The reserve figure is the value the property must achieve; anything below this and the property will be withdrawn from the market.
At all times during the auction, however, the vendor (seller) can withdraw the property from the market, even if it has achieved the reserve figure. The vendor can also reserve the right to sell the property before the auction.
Before the auction takes place, your solicitor should check the contract for sale for the property (issued by the seller's solicitor) and all title documents that are referred to in that contract. When your solicitor has satisfied his or her enquiries, you can organise a survey of the property to ensure it is sound. It is also advisable to get formal mortgage approval for the property you wish to bid for.
The successful bidder immediately pays a deposit and signs the contract for sale (see below). It is important to get home insurance as soon as possible.
Regulation of estate agents and auctioneers
Estate agents and auctioneers are regulated by the Property Services Regulatory Authority. The Authority has introduced a voluntary code of practice for estate agents and auctioneers which sets out their responsibilities to buyers. However, it is important to remember that the estate agent or auctioneer is acting on behalf of the seller and is acting in the seller’s interest.
Sign the contract for sale
The contract for sale binds the parties to the completion of the sale. If you withdraw from the sale after this contract has been signed, you may lose your deposit. If you buy at auction you must immediately sign the contract for sale. If you buy through private treaty your solicitor will check that the contract is in order before you sign it.
In the case of new developments this contract for sale usually includes "building agreements" as most properties these days are sold and developed by the same company. In the past, but now rarely, one company would sell land to a buyer and a different company would build on it. In such instances, the contract is actually a "contract for sale and building agreement" but in almost all residential sales, a contract is simply known as a contract for sale. The completion date will be set out in the contract and the balance of the agreed purchase price will be due on that date.
Closing the sale
Requisitions on Title and Deed of Conveyance
After signing the contract and before the completion date of the sale, your solicitor raises some general queries about the property with the seller's solicitor.Requisitions on Title are a standard set of questions relating to the sale of a property that deal with such things as whether fixtures and fittings are included in the sale.
When your solicitor gets a satisfactory reply to Requisitions on Title, a Deed of Conveyance is drafted by him or her and approved by the seller's solicitor.
Your solicitor makes arrangements for searches to be made against the seller to ensure that there are no judgements lying against the seller (for example, bankruptcy or sheriffs' searches). Your solicitor should also conduct a search where the title to the property is held (either in the Land Registry or the Registry of Deeds) to ensure that there is nothing adverse attaching to the property, for example, an outstanding mortgage.
Once the Deed of Conveyance is approved by the seller's solicitor, your solicitor will contact your mortgage provider to request the issue of the approved loan cheque. This is the remaining balance of the purchase price. It is paid to the seller's solicitor and all documentation, and keys to the premises are handed over to your solicitor.
Your solicitor will calculate how much stamp duty is due and request this from you before the closing of the sale. The stamp duty is paid to the Revenue Commissioners, who place a stamp on the deeds. Without this stamp, the deeds cannot be registered. The deeds name the owner of the property.
After the sale is completed
Once a sale is completed, your deeds, showing the new ownership details and mortgage details, if relevant, must be registered with either the Registry of Deeds or the Land Registry. The Property Registration Authority is responsible for both systems of registration.
Your solicitor will continue to assist you with finalising the deeds to your house with the Property Registration Authority. This can take from months to years to complete. Even if it does take a long time you are still the owner of the property and if you wish you can sell the property before registration is complete.
There are many things to do when moving house, for example, redirecting your post and changing your details on the electoral register. More information is available in our document on moving to a new home.