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Buying your First Property- For the First Time Buyer

For most people especially First-Time Buyers the process involved in buying their property is both an exciting and a daunting experience.

Step 1: Contact Your Bank
Contact your Bank to arrange your finance and this will then be printed out in the form of a Written Loan Offer from your Bank.

Step 2: Find a Suitable Property
Find a suitable Property within your budget. Once you have secured same put down your booking deposit with the Estate Agent involved. You should get a receipt from the Estate Agent for your Booking Deposit. This Booking Deposit is Refundable until the exchange of Contracts.

Step 3: Appoint your Solicitor
Your Solicitor will complete the Legal side of the Purchase/ Conveyance on your behalf.
Contracts are sent to your Solicitor by the Seller’s Solicitor. Your Solicitor will investigate the Title of the Property and will advise you of any issues or special conditions in the Contracts that you should be made aware of.

If you are buying a second-hand property then you are strongly advised to obtain a Structural Survey to complete a report on the Property for you. This ensures that the property is structurally sound and that there are no hidden defects to the property.

Similarly, if you are buying a new Property you will have to carry out your Snag List once the property has been completed to ensure all works have been carried out correctly and to your satisfaction.

Step 4: Sign Contracts
Once all these matters are in order and your written Loan Offer has issued from your Bank you will then be in a position to sign the Contracts for Purchase. At this time your solicitor will also negotiate a closing date based on your instructions. You will also be required to pay the balance of your deposit at the time of the signing of the Contracts. This is normally 10% of the Purchase Price minus the Booking Deposit that you have already paid. At this appointment your solicitor may also get you to sign all the Legal paperwork in connection with your Mortgage in order to speed up the process for you. Your solicitor will then send these documents into your Lending Institution to the Cheque Issue Department to be ready for drawdown when required.

Step 5: The Contracts are Sent
The Contracts will be sent back to the Seller’s Solicitor whereon the Sellers will sign and return one part to your solicitor. Once this happens you are legally bound to complete the Purchase and any deposit monies that you have paid will become non-refundable.

Step 6: Proceed to Completion
Your Solicitor will then raise some further queries called ‘Objections & Requisitions on title’ prior to Closing. All Draft Documents are prepared for Closing at this stage and interchanged between Solicitors for each other’s approval.

Step 7: Closing
Your Solicitor will requisition your Loan Funds from your Bank and discuss with you your closing requirements in full. At this stage you need to finalise your Insurance Policies with your Bank and ensure that all items on you Snag List are finished (if you are buying a new property). The Closing will take place on the date as appointed in the Contract and your Solicitor will firstly carry out Law Searches against all the parties to the transaction to ensure that there are no other interests involved in the property or any litigation pending against the property or the parties to the transaction. Once these searches come back clear your solicitor will exchange the balance of Purchase money with the Seller’s solicitor for the balance of the Title Deeds, Keys and possession on your behalf.

Step 8: Stamping and Registration
Once the Purchase has completed, your solicitor will then present your Deed of Transfer to the Revenue Commissioners to pay your Stamp Duty on your behalf. The Stamp duty is impressed onto the Deed of Transfer. Stamp duty is currently chargeable at 1% of the purchase price on all purchases up to a value of E1 million and thereafter any excess over E1 million is chargeable at 2%.

Your Solicitor will then prepare your documents for Registration in the Land Registry or Registry of Deeds depending on the title of the property.

The registration will typically take between 2-6 months depending on the title and the length of delays in the Registries.

Once the registration has been completed your solicitor will notify you of same and she will schedule up your Title Deeds and return them to your Lending Institution who will hold them as security for the term of your mortgage.

Trading Up or Trading Down Purchasers,Investors & Re-Mortgagors

The 8 steps listed above for First-Time Buyers are also applicable for persons who wish to Trade Up (buy a bigger house) or Trade Down (buy a smaller house) and for persons who wish to buy an Investment Property to rent out.

Other points to Consider:

First-Time Buyers and Investors are generally free from the extra burden of having to sell a property to finance their purchase as in the case of a person who is Trading-up or Trading Down. You may have heard of the term ‘a chain’ in respect of multiple buyers who are each dependent on their own property to Sell so as to enable them to Purchase their new Property.

Delays can sometimes occur with the signing of Contracts due to this ‘chain’ as your solicitor must ensure that you are adequately protected and bound into your sale contract before allowing you to enter into a contract to Purchase.

Sometimes, a position may arise where a buyer’s purchase property closes before their Sale closes. In this situation your solicitor will advise you of the implications of such a situation and the buyer may need to consider bridging finance as a short-term solution until their Sale closes. High Interest rates are charged by lending Institutions on Bridging Finance.

Extra attention should be paid by the Solicitor and also the Client to ensure that all matters are in order for a client who is relying on selling their current property to purchase another. This will prevent delays and much anxiety on all parties concerned.

Stamp Duty Changes in 2011 Budget

The rate of stamp duty on residential property has been reduced to 1% on all properties valued up to €1 million,
A rate of 2% is applied to property valued over €1 million.

The changes take effect from 8 December 2010

All stamp duty reliefs and exemptions listed below are abolished

* • First time buyer relief

* • Exemption for new houses under 125 sq m in size

* • Relief on new houses over 125 sq m in size

* • Consanguinity relief for residential property transfers

* • Exemption for residential property transfers valued under €127,000

* • Site to child relief

Selling your Property

You have decided to Sell your Property,
What happens next?

Step 1: Appoint your Estate Agent/ Auctioneer
Once you have appointed your Estate Agent, your property will be placed on the open market to be sold usually by either Private Treaty or if there is significant interest in your property by Auction.

Step 2: Appoint your Solicitor
While your property is ‘For Sale’ and being viewed you should make arrangements to consult with and appoint a solicitor for the transaction. Your Solicitor will explain the legal nature of the selling process to you and will advise you on the next steps to take. At this time, your Solicitor will also send you out documentation for you to read and sign. One of these documents is called, ‘a client’s authority’ and once you sign and return this to your Solicitor she can apply to your Bank to take up your Title Deeds for the Sale. If you have no mortgage on your property you will probably have your Title Deeds at home or in a place of safe-keeping and you should arrange to give these to your Solicitor.

Step 3: ‘Sale Agreed’ & Contracts Sent to Purchaser’s Solicitor
Once your Estate Agent has found a Purchaser to your satisfaction at an agreed sale price, your property is deemed to be ‘Sale Agreed’. The Purchaser will then place a Booking Deposit set by the Estate Agent down to hold the Property. The Estate Agent will then forward the Purchaser’s details to your Solicitor. Your Solicitor will then Draft the Contracts for Sale from your Title Deeds and Instructions and forward the Contracts to the Purchaser’s Solicitors for signing.

Step 4: Contracts are Returned to your Solicitor
Once the Purchaser has signed the Contracts, his solicitor will send the two sets of Contracts together with the agreed balance of deposit money to the your Solicitor. Around this time a Closing date will be set between all parties and written into the Contracts. Certain special conditions may also be negotiated between the parties e.g regarding Contents or a Defect on title to be rectified by Closing.

Step 5: You Sign Contracts for Sale- Sale Legally Binding
Your Solicitor will then ask you to attend her office to sign the Contracts and she will then send one part back to the Purchaser’s Solicitor. This is the moment when the Sale becomes legally binding and any deposit money paid by the Purchaser becomes non-refundable.

Step 6: Proceed to Completion
The Purchaser’s Solicitor will then raise a Standard set of what called ‘Objections & Requisitions on Title’ for the Vendor’s Solicitor to answer. Your Solicitor and the Purchaser’s Solicitor will then prepare the Closing documents for signing and your Solicitor will ask you to attend her office to sign same in advance of the set closing date. At this time, your Solicitor will order any redemption figures they require for closing from your lending institution, local authority or management Company on title.

Step 7: Day of Closing
On the day of Closing, the Purchaser’s Solicitor will forward the balance of the Sale Price to your Solicitor’s office and your Solicitor will then release the Title Documents, Keys & Vacant Possession to the Purchaser’s Solicitor for the purchaser’s benefit. During the Closing your Solicitor will also be required to answer the Purchaser’s solicitors Law Searches and explain any acts that appear on same to the Purchaser’s Solicitor’s satisfaction. This part of the closing can sometimes take a few hours to complete depending on the title involved. Your solicitor will be in contact with you throughout the Closing Process and will notify you as soon as the closing as completed.

Step 8 : After Completion
After the Closing has taken place, your Solicitor must redeem any existing Mortgages or Charges e.g service charges that affect the property in sale. You will then become entitled to the balance of the Sale Proceeds and your Solicitor will give you a detailed Statement of Account to finalise the transaction for you.