It is natural to feel apprehensive when buying a house but having a good solicitor on your side is the best way to ensure that you are kept up to date all the way through the process. Your solicitor will take care of the substantial legal requirements and eliminate much of the stress you are experiencing.
Here are the stages of buying a house:
1. Decide if this is the right property for you
Whether or not you buy a house is ultimately your decision, but we advise you to look at the bigger picture. This is your home, so take a long-term view of the property. Consider the following:
- Is the house saleable? Factors to consider include the location, local services and amenities, the size of the garden, and the direction it faces (aspect).
- What about schools? Remember that your children are eligible for schools within the church parish of your address: This may not coincide with the townland or address of the property.
- Is the property covered by HomeBond structural defect protection or the Premier Guarantee structural warranty scheme?
- Are you considering renting the property? If so, is this house a desirable rental property? How many other rental properties are nearby? What level of rent are similar local properties attracting?
- What size mortgage will you need to buy the property? How much are the repayments? Will the rent you can expect to charge cover the mortgage repayments?
- Is it a managed estate? Is there a service charge? How much is it? What is covered by the charge (e.g., refuse collection)?
- What is the property’s BER (Building Energy Rating)?
Answer these questions honestly to frame a long-term view of property ownership and determine whether the property is good value.
2. Pay the Booking Deposit
The next stage in the buying process is to place a booking deposit with the sales agent. The auctioneer holds this sum of money until the sale is completed to indicate that the particular property is reserved for you to purchase.
The estate agent will send copies of the document of sale details to the seller’s solicitor and to your solicitor. This document contains details of the price, conditions of the sale, the estimated closing date, and the names and addresses of all those involved in the sale.
Note: The booking deposit does not oblige you to purchase the property until you have signed contracts with your solicitors and the vendor has countersigned them.
3. Receive Contracts for Sale
After you have paid the booking deposit, the vendor’s solicitor will send your solicitor the draft purchase contracts.
Note: If vendors solicitors don’t have the title deeds, you might have to wait between 4-8 weeks to recieve the contracts for sale.
4. Arrange Loan Approval
Loan approval is something you should be looking at once your booking deposit is accepted, and your solicitors have the drafted purchase contracts. Also known as a facility letter, loan approval is the bank or building society’s official confirmation of the amount and terms of the mortgage they have agreed to give you. Terms include the length of the mortgage, the interest rate, and whether the rate is variable or fixed. Tell your bank to forward the loan pack directly to HOMS Assist.
5. Structural Survey
Your surveyor, engineer or architect should carry out a detailed structural survey to highlight any issues you may not have known about when you made your offer.
If you are buying a newly built home, you should arrange to have a snag list drawn up once you receive a completion notice from the builder. The builder will work on fixing the snags. Sometimes you can withhold a small percentage of the purchase price of the property until the end of what is called a defects liability period, which is an agreed length of time when the builder agrees to fix any further problems that may arise, free of charge. Discuss this with your solicitor first.
6. Signing Contracts
Once we have both the title documents and your lender’s letter of offer and loan pack, we will arrange a convenient time for you to come into the office and sign the purchase contract. At this appointment, we will:
- explain relevant details about the title and ownership of the property
- confirm the purchase price.
- ask you to confirm the property, its dimensions, and its location on an official title map
- let you examine the specification (new builds), if you have not already seen it
- inform you about the management company and its service charge and terms/obligations of membership, if applicable
- discuss the closing date (the date on which you will receive the keys)
- advise you on the terms of the mortgage loan offer to ensure that the offer is in order and that you know the terms. We will also confirm the timeframe within which you must accept the letter offer for it to remain valid
- present the contracts and the loan documents for signing and accept a balance deposit from you.
You will then need to pay your deposit, usually 10-20% of the purchase price.
After the contracts are countersigned by the vendor and exchanged, the contract is binding on both parties at the price and closing date agreed.
7. After Contact Signing
Your solicitor will now work with your bank to ensure that the loan funds are in place for the agreed closing date. This is your opportunity to arrange the final items required by your lending, including:
- Mortgage Protection: An insurance policy that covers the full mortgage repayment in the event of your death.
- Property Structural Insurance/Fire Cover: Your lender will require you to insure the property for the cost of rebuilding it, so that if the property is destroyed by one of the risks covered in the policy, the costs of reconstruction is covered.
We will tell you how much of the purchase price you have left to pay, including the mortgage funds you are borrowing from the bank and costs such as stamp duty and registration fees. The current rates of stamp duty for purchases of residential property in Ireland are 1% of the purchase price of the property up to €1 million and 2% of the portion of the purchase price above €1m.
Note: You must have these funds in place before the closing date.
8. Mortgage Drawdown
Before you can draw down your mortgage, your bank will require:
- A professional valuation of the property
- Home insurance
They will then issue a formal letter of offer detailing:
- The mortgage value, length, cost and repayment schedule
- The address and description of the property
- Terms and conditions
- Expiry date of the offer
9. Receiving Your Keys
The day has finally arrived: The balance of the purchase price is transferred, your solicitor conducts the final checks, and, once everything is in order, the seller receives the purchase price and you receive the keys. The property is now yours! But our work continues…
10. After Completion
Once your solicitor has closed your purchase, you will need to sign the purchase deed. Your solicitor will then arrange payment of government stamp duty and register the property in your name in the central government registry. After the property is registered, you will be informed, and the deeds will be sent to your lender for the duration of the mortgage. Cash buyers are entitled to keep the deeds.