So you are thinking about buying a home, you may be a first time buyer or you may be in the market trading up to a larger home. Whatever step of the property ladder you are on there are a few simple steps you will need to take now. We have prepared a general guide to buying property in Ireland, and we hope you find our overview interesting and helpful.
The first step in buying your home is figuring out how much you can afford. Your first port of call should be to contact a mortgage advisor. They will be able to indicate how much you can borrow based on your earnings, your current financial commitments and any other savings you may have.
When successful with a mortgage application you will be given "Approval in Principle". This is how much the lending institution is prepared to give you (in principle - i.e. terms and conditions apply). You now know how much you can afford but you should take into account the costs of buying a home before you go house hunting.
You should be aware that there are many costs involved in buying a home other than the obvious.
The best way of finding property is on Ireland’s largest property websites, myhome.ie, daft.ie and property.ie, all of the leading Estate Agents will have their properties on view there, its also a good idea to drive around local areas that you would like to live, to see “For Sale” signs.
When you find a home that interests you, you need to make an offer. There are two methods by which property is commonly sold: private-treaty & public auction.
Once your bid or offer is accepted, the next steps are:
Once you have decided to proceed with the purchase of the house and have 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%. You will also need to inform your Solicitor that you have paid your deposit and to expect confirmation details on the transaction from the Estate Agent. 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.
This is prepared by the Estate Agent and issued to you, your Solicitor and the Builder's Solicitor. It contains the price, conditions of sale, estimated closing date, names and addresses of all parties.
The seller's Solicitor on receipt of the Sale Details, will issue the Contracts. The Contracts are sent in duplicate together with a copy of the Title Deeds to your Solicitor.
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.
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 Seller’s Solicitor.
The Seller'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.
All lenders require you and your partner to have Life Insurance, or more commonly known as Mortgage Protection. If either you or your partner dies 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.
On exchange of Contracts, your Solicitor returns the loan acceptance and ancillary documents to your Bank/Building Society.
Your Solicitor raises Requisitions (lengthy Questionnaire) on Title and these are sent to the Sellers Solicitor together with a draft Purchase Deed. The Sellers Solicitor replies in writing to the Requisitions received from your Solicitor and approves the Deed.
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 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 finalized 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 (see 15 below). This takes into account any extras or allowances agreed by you and the Seller.
This is received in advance of the completion date.
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.
The completion is the formal completion of the purchase. This takes place at the Seller's Solicitors offices. 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.
After 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.
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.
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.
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.
Buying a home is one of the biggest financial decisions you will make in your life and is up there with marriage and divorce as one of the most stressful experiences. Location and space are key factors when moving home especially if you are on a budget. If you have found a place with enough space for your requirements, you want to make sure that the location is up to the mark. The ability to identify an area on the up is a skill that we all envy. We all know someone who bought at the right time in the right location. This often means being able to identify an area on the up before it is actually up to ensure that you get real value for your money.
We all want great neighbours but we all have a different definition of what constitutes a great neighbour. Do you want young party animals to have fun with or quiet families who will keep to themselves. Talk a walk around the area at different times of day to get a feel for the neighbours to see if they are your kind of people.
New shop openings in an area are usually a sign of an area on the up. Cappucino bars, Deli's and other eateries are all aspirational aspects of modern living so if you spot these kind of places opening their doors in the neighbourhood, it could be an good indication of what's to come. Shops, restuarants, bars and cafes all attract people with money to spend. It would be great to spot these kind of areas before this happens as if it has already happened you may have already missed out on a bargain property.
Areas that are getting a lot of investment, maybe from the local council in the form of tree planting, road re-surfacing or litter bin installation, usually means that there is a lot of investment being attracted to the area. These are all good signs.
An area with good quality historical buildings ripe for conversion to modern living are always good. You may spot a lot of renovation work going on in properites in the area. If you see the developers moving in, then it is likely that this will be good investment. Try to spot a building with development potential and you might end up with a right bargain on your hands.
Your current desires and needs in a property may not be the same in a few years time. As your life changes so too do your housing requirements. You might be single and carefree now but think ahead. Investing in a larger property with more space than you currently need may prove to be the brightest decision you have ever made if you end up married with a couple of kids a few years down the line. In the meantime, you can always rent out a room to supplement those mortgage repayments. On the other hand, you will also want to consider the ease with which you will be able to resell your property should you decide to move on. You may also want to investigate local amenities such as schools, parks and clubs, which can be a big attraction for families in particular.
You need to make a life choice when choosing an area to live. If you have a family, you may not want to live next the local night-spots but if you are young, free and single, it could be ideal.
In many areas on the up you will often spot skips outside properties as new people are moving to the area, gutting their homes and making big investments in their their future there. If your neighbours properties have been revamped and refurbished, this will automatically improve the potential value of your home simply by demonstrating the potential of the property. Money attracts more money but remember you will need to speculate to accumulate.
If there is a college or university in the area, this is always a good sign for rental potential on a property. Renting to students can be a great source of revenue for you.
Again go back to the planning office to check out any plans for new transport routes - trains, buses, roads, luas or dart lines. Extensions of any of these to new areas usually implies that a large amount of investment will follow.
Places on the fringes of good area will often follow suit in becoming desirable too. Check out the plans for the area with your local council. You can actually look at the plans in your local planning office to give you a good idea of what the plans are for the area.
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