Steps to buying a property
- Contact your solicitor: They say that buying a house is one of the most stressful things you will ever do in your life. It is therefore vital that you establish a rapport with your solicitor, and know that they will be on the other end of the phone to answer any questions you have along the way. We always tell clients not to be at home wondering what to do next. Call us. We are doing this day in, day out and are only too happy to answer any questions you may have.
It is also very important to understand the costs associated with buying a house, to include the fees payable to your solicitor and the outlays which are payable to third parties, such as the Revenue Commissions for Stamp Duty etc. Your solicitor will provide you with a full estimate of their fees, VAT and outlay payable on the purchase of a property.
- Mortgage approval in principle: You should apply to your bank for mortgage approval in principle. This is not full mortgage approval, but it is a useful guide to assist you in understanding how much you can borrow based on your savings and repayment capacity. Once you have an indication from your bank as to how much you can borrow, you know how much you can pay for a house.
- Property: Once you find a property you like, and your bid is accepted, you will be asked by the auctioneer to give them a booking deposit. At this point you are Sale Agreed The auctioneer will ask for your solicitors’ details.
Any booking deposit paid is fully refundable up until the point that binding Contracts for sale are in place. (See point 9 below).
- Full Mortgage Approval: Once you have gone Sale Agreed on a property you should advise your bank of the property address. Your bank will guide you through the steps to formal loan approval. Again, your bank will require your solicitors’ details, as once you have received formal loan approval, a legal pack will issue to your solicitor. This legal pack includes a copy of your Letter of Loan Offer and all the legal documentation necessary for your solicitor to drawdown and register the mortgage over the property.
- Contracts for Sale: Your solicitor will receive Contracts for Sale and a copy of the title to the property from the Vendors solicitor. Once they receive this they will review it with 2 things in mind.
- Your solicitor will raise any pre contract queries they have regarding the title with the Vendors solicitor.
- Your solicitor will write to you the purchaser, and provide an overview of the Contract and advise you of the next steps in the conveyancing process.
- Structural Survey: In our professional view it is only at this stage, when your solicitor has received Contracts for Sale and the title to the property that the Purchaser should engage the services of an Engineer to attend at the property to carry out a full structural survey and boundary survey. The structural survey will ensure the property does not suffer from any significant structural defects and the boundary survey will ensure that the property on the ground corresponds with the property as outlined on the title map, if applicable.
One common question we get asked is whether a purchaser needs a structural survey when the bank have commissioned a valuation. A structural survey is not the same as a valuation. A valuation is carried out by an Auctioneer, on behalf of your bank, to ensure that there is adequate security for the mortgage requested. i.e. that you are not borrowing more than the house is actually worth!
- Mortgage Conditions including mortgage protection and house insurance. You should at this point ensure that you can obtain mortgage protection insurance. If it is necessary for any party to the mortgage to undergo a medical this should be done before signing Contracts for Sale.
Likewise it is vital to confirm that you can take out house insurance on the property.
Note: Do not set up the policies. Simply apply for the policies and ensure you are fully approved. Your solicitor will advise you of when to set up the actual mortgage protection and house insurance policies.
- Planning: The purchaser’s solicitor will review the planning history of the property and ensure that the Vendor has provided a Certificate of Compliance with Planning Permission and/ or Building Regulations for the construction of the property and any subsequent extensions or alterations.
Your solicitor will also carry out a full planning search in the local County Council office. This will ensure that there are no breaches of the planning acts recorded on the County Council file, and that there are no Council Enforcement issues to be dealt with pre contract.
- Signing Contracts For Sale*. Only once all of the above matters are in order will the Purchaser sign Contracts for Sale and the mortgage Letter of Loan Offer.
Contracts for Sale will be signed in duplicate and returned to the Vendors solicitor with a deposit equal to the balance of 10% of the purchase price.
(Note: The auctioneer holds the booking deposit)
The Vendor then signs the Contracts. Binding Contracts for Sale are now in place, subject to any agreed special conditions.
*If you choose not to sign Contracts for Sale at this point and withdraw from the purchase, you are entitled to a refund of any booking deposit paid. You will have fees and outlay due to your solicitor and engineer for work done to date which should be discussed with the various parties.
- Closing date: The parties’ solicitors set a date for closing. Closing is the date that your solicitor hands over the balance closing monies to the Vendors solicitor and legal title is transferred to the Purchaser.
- Mortgage Draw down: Once a closing date has been set you will be asked by your solicitor to set up your mortgage protection and house insurance policies. It is only now when your solicitor looks to draw down funds that these policies should be put in place, not earlier.
Your solicitor will liaise with you, and your mortgage advisor, to ensure that all documentation required by the mortgage bank are processed swiftly and funds released by your bank in time for the closing date.
- Closing Day: On the closing day the Vendors solicitor will deliver all title documentation to the Purchaser solicitor.
In return, the Purchasers solicitor will transfer the balance purchase monies to the Vendors solicitor.
The Vendors solicitor must reply to closing searches, which is an up to date search against the Vendor, the Purchaser and the title to the property.
Once documentation, money and closing searches are all in order, the sale will close. Congratulations!
- Post Closing: You will need to attend with your solicitor to sign the Deed of Transfer, at which stage the solicitor will pay any Stamp Duty due to the Revenue Commissioners, and lodge your application to become registered as owner with the Property Registration Authority of Ireland.
- Once you are registered, your solicitor will send your original title deeds to your mortgage bank. Your bank will hold those deeds for the length of your mortgage. You will receive a copy of the Folio showing you as the registered owner.
- Your solicitor will refund any over payment of outlay to you and close the file.
Here at Moylan and Co we have over 20 years experience guiding purchasers through the conveyancing process, and we look forward to partnering with you on this exciting journey!
Moylan and Co Solicitors,
4 Francis Street,