Step by step guide
1. BUDGET / QUOTE
When you are starting out on the property buying journey you need to carefully budget before considering any property. This involves calculating the funds at your disposal either on deposit or cash, estimating the value of your equity in your existing house, if applicable, getting a quote from a Solicitor of the costs involved in purchasing, obtaining approval in principal from a lender-this gives confidence that a lender will lend a certain amount of money when a property is found.
2. APPOINT A SOLICITOR
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If you have decided to proceed with the purchase of the house and having been approved, at least in principle, for the loan, you should pay a booking deposit to the estate agent. Booking deposits can be as low as €3,000 but can be up to 3%. This deposit is refundable up to the point where contracts are signed. When the Estate Agent receives the booking deposit they issue a sale details to all parties.
4. SALE DETAILS
This is prepared by the estate agent and issued to you, your solicitor and the vendor’s solicitor. It contains the price, conditions of sale, estimated closing date, names and addresses of all parties.
5. CONTRACTS RECEIVED
The vendor’s solicitor on receipt of the sale detail will issue the Contracts. The Contracts are sent in duplicate together with a copy of the Title Deeds to your solicitor.
6. LOAN OFFER
Once your bank/building society has formally approved your loan in writing on the basis of the price of the house and information furnished by you, a formal loan pack is issued. Normally a letter of offer setting out the main details of the loan is issued to you and the loan pack comprising mortgage documentation, acceptance of letter of offer and assignment etc., is issued to your solicitor. When your solicitor has checked the loan pack and discussed key terms with you, various documents are signed and completed to enable the bank/building society to proceed. This offer will include all the particulars of the mortgage such as rates and repayment term.
7. SIGN CONTRACTS, PAY DEPOSIT
When your solicitor has checked the contracts you will be required to visit your solicitor to sign the contracts and pay the contract deposit (10% of the purchase price less booking deposit already paid). With a new house you may not be obliged to pay a full 10%, instead a reduced payment (called a stage payment) is accepted. The amount of the stage payment is specified by the estate agent at the outset. This should happen within 3 weeks of paying deposit. Your solicitor returns the contracts and building agreements in duplicate signed by you together with the contract deposit/stage payment to the vendor’s solicitor.
8. CONTRACTS EXCHANGE
Vendor’s solicitor returns one copy of the contract and building agreement. This creates a binding agreement between all parties, subject to the terms and conditions contained in the contract.
9. LIFE INSURANCE/HOME INSURANCE
All lending institutions will require you to have life insurance, or more commonly known as mortgage protection. If you die before the mortgage has been repaid, insurance is designed to cover the mortgage amount outstanding, at the very minimum, depending on the type of life cover selected. Home insurance is also highly advisable and is required by all lending institutions to insure your home and property against e.g. fire, theft. This step often takes longer than many buyers expect so allocate time to making it happen.
10. LOAN ACCEPTED
On exchange of contracts, your solicitor returns the loan acceptance and ancillary documents to your bank/building society.
11. TITLE WORK
The solicitor acting for you as buyer raises requisitions (lengthy questionnaire) on Title and these are sent to the vendor’s solicitor together with a draft Purchase Deed. The vendor’s solicitor replies in writing to the Requisitions received from your solicitor and then approve the Deed.
12. NOTIFICATION OF COMPLETION – NEW HOUSE ONLY
When the house is finished the builder sends you and your solicitor a “Completion Notice”. This is an important document and sets the meter running against you within which time period you must finalise completion. Immediately on receipt of the Completion Notice you must “snag” the house. This is a formal inspection by you or your agent to establish that the house has been finalised. You draw up a list of any unfinished works. This list, known as a “snag list”, is prepared in duplicate and one copy retained by you and the other handed to the site foreman. You should contact the site foreman within a number of days to check if all the items of the “snag list” have been completed and that exercise should be repeated until all matters have been dealt with. Immediately when the house has been completed to your satisfaction you should inform your solicitor.
Once all queries raises and the requisitions have been satisfied and all matters are dealt with a closing date and time is finalised to suit all parties. You should check with your bank/building society that everything is in order to allow the loan cheque issue. A common cause of delay is that the life insurance or fire insurance has not been taken out in time. Your solicitor will prepare a statement setting out the balance required to complete the purchase and costs. This is sent to you in advance of the completion in order that you can deliver the balance of funds to your solicitor. This takes into account any extras or allowances agreed by you and the vendor.
14. LOAN CHEQUE
This is received in advance of the completion 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 the completion date.
16. CLOSE SALE AND MOVE IN
The completion is the formal completion of the purchase. This takes place at the vendor’s solicitor office. You do not need to attend as your solicitor will represent you. Your solicitor checks the vendor’s title and when he/she receives good Title with fully signed documents hands over the balance of the purchase price. At that keys are handed over to your solicitor for a second hand purchase; for a new house the site foreman is contacted by telephone following completion of the transaction and informed to release the keys to you. Usually you collect the keys from the site foreman.
17. SIGN DEED
Once the sale is completed you must sign the Purchase Deed. This document is only handed over to your solicitor at the closing and is not available for signature by you prior thereto. You must sign immediately following the closing as there are strict time limits for stamp duty.
18. STAMPING/ REGISTRATION
Following signing by you of the Purchase Deed your solicitor will proceed to stamp the purchase deed and mortgages and then register same in the Land Registry/Registry of Deeds. Registration can take months, if not years, depending on the county and type of property involved.
19. REGISTRATION COMPLETE
At this stage you are registered as owner of the house in either the Land Registry or Registry of Deeds. Legal ownership to the property passes to you on completion of the purchase but registration may take a minimum of 6 months. This delay does not in any way undermine the fact that you are the legal and beneficial owner of the property. Indeed you can sell a property even though registration has not been finalised in the Land Registry or Registry of Deeds.
20. SIGN DEED
Your Solicitor, on completion of registration, returns your Title Deeds, to your Bank/Building Society together with a Certificate confirming that you have acquired a good marketable Title. Usually, you will be notified that registration has completed and the Title Deeds have been returned. At this stage your Solicitor closes off your file.