Before you consider purchasing, firstly make a list of your property requirements. Items you should consider include:
3. Type of house – semi detached, detached, terraced
4. Size of property
5. Modern convenience or period charm
6. Is a garden important to you?
9. Access to public transportation
10. Access to village, shops, schools
Steps when purchasing a property:
You need to carefully consider your budget when considering purchasing a property. This involves calculating monies at your disposal, getting a quote from your solicitor of the costs involved in purchasing and obtaining approval in principal from a lender.
2. Appoint a Solicitor
3. Security Deposit
All sales require a security deposit. This deposit is refundable under certain conditions. When the estate agent receives the booking deposit, sale details are issued to all parties.
4. Sale Details
This is prepared by the Estate Agent and is issued to your Solicitor and the Seller’s Solicitor. It contains the conditions of sale, the sale price, the property address,estimated closing date and names and addresses of all parties.
5. Contracts Received
The seller’s solicitor on receipt of the sale details, will issue the contracts. These are sent in duplicate to your solicitor together with Title Deeds.
6. Loan Offer
Once your lender has formally approved your loan in writing on the basis of the price of the house and information furnished to them by you, a loan pack is issued which will include all the particulars of the mortgage such as rates and repayment terms. Acceptance of this is issued to your solicitor. The solicitor will talk you through all the documents and once signed they must be returned to the lender.
7. Sign Contacts and Pay Deposit
When contracts have been checked by your solicitor, they will require you to sign them and pay the contract deposit (10% of the purchase price less the booking deposit already paid). Contracts are sent in duplicate to the seller’s solicitor for signing.
8. Exchange of Contracts
The seller’s solicitor returns one copy of the Contract to your solicitor which creates a binding agreement between all parties, subject to the terms and conditions set out in the contract.
9. Life/ Home insurance
All lenders require you and your partner to have Life Insurance or Mortgage Protection. This step often takes longer than expected so its wise to allocate some time to doing this.
10. Loan Accepted
On exchange of contacts, your solicitor returns the loan acceptance documents to your lender.
11. Title Work
Your solicitor raises requisitions on title which are sent to the seller’s solicitor together with a draft purchase deed. The Seller’s solicitors replies in writing to the requisitions and approves the deed.
12. New House Build – notification of completion
Your solicitor will receive a completion notice when the house is finished. Immediately upon receipt of this you must snag the house. This is a formal inspection by you or your agent to establish that the house has been finalised. When a snag list is drawn up it is normally given to the site foreman. You should contact the Foreman after a few day to see if the snags have been completed. This is repeated until all matters have been dealt with. When you are satisfied the sang list is complete you should inform your solicitor.
Once all the above matters have been dealt with a closing date is finalised. At this stage you should check with your lender that everything is in order to allow the loan cheque to be issued.Your solicitor will prepare a statement setting out the balance required to complete the sale. This is sent in advance of completion in order that you deliver the balance of funds to your solicitor. This will take into account any extras or allowances agreed between you and the seller.
14. Loan Cheque
This is received in advance of the closing date.
15. Balance of Funds
These are delivered by you, by bank draft made payable to your solicitor in advance of the completion date. Normally the loan cheque and balance of funds are received the day before completion date.
16. Close of sale and Move In
This is the formal completion of the purchase. This takes place at the Seller’s Solicitors where your Solicitor will represent you – you do not need to be present. Your solicitor checks the Vendor’s Title and and hands over balance of purchase price. The keys are then handed over to your Solicitor.
17. Sign Deed
After the sale is completed you must sign the Purchase Deed.
18. Stamping/ Registration
Following signing of the Purchase Deed, your solicitor will proceed to stamp the Purchase Deed and mortgages and register same in the Land Registry. This can take a long time to process.
19. Registration Complete
At this stage you are the registered owner of the house either in the Land Registry or Registry of Deeds.
20. Sign Deed
Your solicitor, on completion of registration, returns your Title Deeds to your lender together with a certificate confirming that you have acquired a good marketable title.
Watch out for hidden extras:
Stamp duty is a big expense but also look out for estate agency fees, legal fees, surveyor costs, local property tax, house insurance and mortgage protection insurance.
This is calculated at 1pc of the selling price of any property up to €1m (2pc thereafter) and all buyers including first time buyers are subject to the same rate.
For example if you buy a house worth €200,000 you will pay stamp duty of €2,000. You should remember that this can not be included in the mortgage and should be saved in addition to the deposit.
Lending Agency Fees, Estate Agents & Brokers:
Lenders may impose an application fee, as well as the costs of the lender’s survey and searches. There may also be fees for the mortgage loan costs and an indemnity bond.
Estate Agency fees vary, ranging from 1pc to 2pc commission on the sale price of a house. Some mortgage brokers charge a fee to give you advice or to arrange your mortgage. Many do not charge any fee so it is worthwhile checking in advance.
Solicitors can charge a flat fee or more usually a percentage of the purchase price which is rarely higher than 2pc. There may be costs associated with the legal process that will not usually be included in the solicitor’s fees including land registry fees and fees for legal searches. VAT is also payable on legal fees.
A seller is under no obligation to tell you about any defects in a property, so you should get a survey of the property to find out if there are any defects before finalising a purchase. The Society of Chartered Surveyors Ireland (SCSI) is the professional body for Chartered Surveyors. Costs can vary and again it is worth researching in advance.
Local Property Tax:
Buyers of a new house from a developer at any point before 31st October 2016 are exempt from LPT. More information is available from the revenue website – www.revenue.ie
Most lenders will insist that you take out mortgage protection insurance, a type of life insurance policy that pays off your mortgage if you die before the end of the term. Many people confuse this with mortgage repayment protection insurance which is not obligatory. The lender will often offer to sell you a policy, but you don’t have to buy if from them and it can be cheaper to buy elsewhere. Thousands of euro can be saved by choosing the best value mortgage protection policy.
Helpful websites and contact numbers:
www.scsi.ie (telephone 01 6445500)
www.sky.com/ireland (telephone 0818 904055)
www.upc.ie (telephone 1908)
www.eircom.net (telephone 1901)
www.bordgaisenergy.ie (telephone 1850 632 632)
www.electricireland.ie (telephone 1850 372 372)
www.airtricity.com (telephone 1850 812 220)