Pay deposit: When you have chosen your property, you normally pay a booking deposit to the estate agent or builder. Booking deposits can be as low as €3,000.00 but may be more in certain cases. The deposit is refundable up to the point where contracts are signed. The estate agent will issue a “sales advice note” containing the price, conditions of sale and estimated completion date for the transaction.
Loan Offer: You should contact your lender as early as possible in the home buying process. When you have chosen your house, you should then contact your lender again. Your lender will issue a formal loan pack. This loan pack will then be sent to your solicitor. You should also arrange Mortgage Protection Insurance and Home Insurance at this stage.
Contracts received: The builders solicitors will send Contracts to your solicitor. Your solicitor will study the Contracts and check the title documents. Once your solicitor is satisfied that everything is in order, you will sign contracts with your solicitor and they will be sent to the builder/seller. A 10% deposit is usually paid at this stage (less the booking deposit).
Contracts exchanged: The seller/builder will then sign the contracts and return one copy to your solicitor. At this stage a binding agreement is in place between all parties. Up until this point, either party can change their mind and withdraw from the transaction without penalty.
Loan Accepted: On exchange of contracts, your solicitor will return loan acceptance and other loan documents to your bank / building society.
Completion (New houses only): When your new house is complete, the builder will notify your solicitor. At this point, you should carry out a snag list. The purpose of the snag list is to make a list of any unfinished work left in the house and request the site foreman to complete the work.
Close sale: The closing date is the date on which your solicitor will pay the purchase money of the house on your behalf. In return, your solicitor will receive title deeds to the property and keys. You become the legal owner of the property on the closing day.
Stamping / registration: After the closing date, your solicitor will send Deeds to the Revenue Commissioners for stamping and then to the Land Registry/Registry of Deeds to register you as owner. Once this is done, your solicitor will send your Deeds to your lender.
* the above is intended as a guide only should not be relied upon as definite legal advice. Each person and situation varies and therefore advice may vary depending on your individual circumstances. You should contact us for further advice on all of these issues, This is a brief guide answering some of the most common questions which first-time buyers have.
Solicitor's Role in House Purchase/Sale
1. Buying a house is a big decision financially. It is essential that it is done properly and professionally. A solicitor will deal with the following:-
Explain the sale process to you to ensure that you understand what is happening at all times;
Check the title to the property. This involves checking many issues including that all planning permissions are in order, that no Court Orders are registered against the property, that no mortgages are registered against the property and in general check that there are no unusual legal features. If your solicitor does not carefully check that all these matters are in order, it may cause difficulties for you when you sell the property;
Ensure that the contracts which you sign do not contain any unfair terms;
Assist in dealing with your bank/building society to ensure that there are no legal obstacles to your loan cheque being issued on time.
2. Must I pay Stamp Duty?
If you have not owned property previously, you may qualify for first-time buyer relief. A first-time buyer generally will not pay stamp duty on a new house and will only pay stamp duty on a second hand house if the purchase is more than €317,500.00. However, each situation is different and you need to check the position carefully with your solicitor.
In order to qualify as a first-time buyer, you must live in the property for five years from the date of purchase. If you move out during this time, stamp duty may become payable on the date you move out.
3. What if I am a First Time Buyer and my partner is not?
In order to avail of First-Time Buyer relief, both purchasers must be First Time Buyers. You cannot obtain First-Time Buyer Stamp Duty Relief if only one of you is a First Time Buyer.
4. What will my solicitor charge?
A solicitors’ charge will be made up of two items. Firstly, the solicitor will charge fees for his/her work. Secondly, a solicitor will charge you for outlay which your solicitor will have to pay in order to have you registered as owner. This outlay will include such items as payments to the Land Registry to have you registered as owner of the property.
Solicitors fees vary, but for First Time Buyers, our typical fees would be €1,250.00 (plus V.A.T.@ 21%). You should allow a figure of €750.00 for outlay.
5. When should I contact my solicitor?
It is advisable to contact your solicitor as early as possible in the purchase process. If you contact your solicitor at an early stage, your solicitor will be able to give you helpful advice on the purchasing process.
6. When should I contact my Bank/Building Society?
Again, you should contact your bank/building society as early as possible. This will help you to budget for the purchase as your bank will be able to let you know how much you can borrow.
7. Should I have a survey carried out?
If you are buying a second hand property, you are strongly advised to have an architect/engineer carry out a structural survey of the property. Your architect/engineer will check that the house is structurally sound and does not have any physical defects.
Even where you are buying a new house, you are still advised to have a structural survey carried out.
8. What is a Planning Search?
If you purchased a house in a quiet rural location, how would you feel if you then discovered that a developer had obtained planning permission to build a factory beside you? A planning search is a search in the City Council/County Council Planning Office to find out whether any development is planned for the area surrounding your new home. It is advisable to have your architect/engineer carry out such a planning search on your behalf.
9. Must I pay a deposit?
Whether you are buying a new house direct from a builder or a second hand house through an auctioneer, you will usually be expected to pay a booking deposit. This can vary between €3,000.00 and €10,000.00. At a later stage, when you sign contracts, you will then be expected to pay a deposit of 10% of the purchase price (less your booking deposit). In certain circumstances, your solicitor may be able to negotiate a reduction in this deposit, for example if you are obtaining a mortgage of 95% of the purchase price.
10. Do I get any Tax Relief?
Most first-time buyers are entitled to tax relief on mortgage repayments. Your lender will give you the Claim Form and you then submit it to the Revenue Commissioners.
11. What is a Co-Ownership Agreement?
Where a couple purchases a property and they are not married, it is recommended that you sign a Co-Ownership Agreement. The purpose of the Co-Ownership Agreement is to decide the basis on which you own the property. For example, the agreement will set out whether you own the property equally or whether one of you should have a larger share in the property. It will set out whether each of you should be equally responsible for monthly mortgage repayments or whether one partner would pay more than 50% of the mortgage repayments. The agreement will also set out what would happen if you were to split up.
A solicitor will usually charge an extra fee for completing a Co-Ownership Agreement. However, a Co-Ownership Agreement may save a lot of hassle and expense in the future.
12. Should I Make A Will?
Yes. It is always recommended that you have a Will in place, particularly when you own property.
* The above is intended as a guide only and should not be relied upon as definitive legal advice. Each person’s situation varies and therefore the advice may vary depending on your individual circumstances. You should contact us.
