The legal process of buying and selling a property is called conveyancing. Conveyancer is the generic term given to a solicitor who works in the area of buying and selling property.
Before You Decide to Buy
Find out what you can afford
It is important to evaluate all costs involved in buying a home, for example, mortgage costs, legal fees, registration of deeds and stamp duty. If you have calculated that you can afford to buy a property taking into account all of these costs, then you are ready to buy.
Find a property you like and can afford
Property websites, auctioneers and estate agents are the main ways of finding property for sale. There is a public register of auctioneers and estate agents on the website of the Property Services Regulatory Authority.
Sometimes individual sellers advertise their property themselves. Newspapers may also have property supplements or publish advertisements for properties for sale.
The Property Services Regulatory Authority publishes a Residential Property Price Register. It contains information on residential properties bought in Ireland since 1 January 2010. You can check the register to see what price was paid for a property if it was sold since 1 January 2010.
All homes for sale must have a Building Energy Rating (BER). A BER will inform you how energy-efficient the home is. It will help you make an informed choice when comparing properties. It also offers guidance on steps that can be taken to improve the energy efficiency of a property.
Get a survey
A seller is under no obligation to disclose defects in a property. You should get a survey of the property to find out if there are any defects before finalising the purchase. The Society of Chartered Surveyors Ireland (SCSI) is the professional body for chartered surveyors.
Your solicitor will calculate how much stamp duty is due and request this from you before the closing of the sale. The stamp duty is paid to the Revenue Commissioners, who place a stamp on the deeds. Without this stamp, the deeds cannot be registered. The deeds name the owner of the property.
Get Mortgage Approval
Very few people can buy a home without getting a mortgage. A mortgage is a long-term loan secured by the property you purchase. This means if you don’t repay your mortgage you may lose your home.
There are different types of mortgages and different mortgage providers. Contact a number of different mortgage providers to find out who can offer you the best deal. More information on mortgages and choosing the best one for you is available on the Competition and Consumer Protection Commission’s website.
You can get mortgage approval in principle before you start to look for a property; this will let you know how much you have to spend. However, when you find a property you like, you must get formal mortgage approval before you sign the contract for sale (see below). If you sign a contract for sale and subsequently don’t get mortgage approval, you will lose your deposit and there may be other penalties.
How to buy the property you want
The two most popular methods by which properties are purchased and sold are:
- Private treaty sale
- Public auction
Private Treaty Sale
A private treaty sale is where the property is not put into an auction. You can contact the seller or the seller’s agent, usually an estate agent, to agree on a purchase price.
If there is an estate agent involved, once you have agreed to buy the property you may be required to pay a booking deposit to the estate agent. The legal process to buy the property may only start when the estate agent receives your booking deposit. This deposit is refundable up to the signing of the contract for sale (see below).
Your mortgage provider will give you formal mortgage approval and issue you with a loan pack. You will need to have mortgage protection insurance and home insurance. You can organise these with your mortgage provider but it is advisable to shop around. When your solicitor has checked the contract for sale, you will sign it and pay a deposit (less any booking fee).
Notice of the date and time of the auction is usually advertised in a local newspaper, estate agent or by a sign on the property. A reserve figure is set for the property, usually by the seller or the auctioneer. The reserve figure is the value the property must achieve; anything below this and the property will be withdrawn from the market.
At all times during the auction, however, the vendor (seller) can withdraw the property from the market, even if it has achieved the reserve figure. The vendor can also reserve the right to sell the property before the auction.
Before the auction takes place, your solicitor should check the contract for sale for the property (issued by the seller's solicitor) and all title documents that are referred to in that contract. When your solicitor has satisfied his or her enquiries, you can organise a survey of the property to ensure it is sound. It is also advisable to get formal mortgage approval for the property you wish to bid for.
The successful bidder immediately pays a deposit and signs the contract for sale (see below). It is important to get home insurance as soon as possible.
Sign the Contract for Sale
The contract for sale binds the parties to the completion of the sale. If you withdraw from the sale after this contract has been signed, you may lose your deposit. If you buy at auction you must immediately sign the contract for sale. If you buy through private treaty your solicitor will check that the contract is in order before you sign it.
In the case of new developments, this contract for sale usually includes "building agreements" as most properties these days are sold and developed by the same company. In the past, but now rarely, one company would sell land to a buyer and a different company would build on it. In such instances, the contract is actually a "contract for sale and building agreement" but in almost all residential sales, a contract is simply known as a contract for sale. The completion date will be set out in the contract and the balance of the agreed purchase price will be due on that date.
Closing the Sale
Requisitions on Title and Deed of Conveyance
After signing the contract and before the completion date of the sale, your solicitor raises some general queries about the property with the seller's solicitor. Requisitions on Title are a standard set of questions relating to the sale of a property that deals with such things as whether fixtures and fittings are included in the sale.
When your solicitor gets a satisfactory reply to Requisitions on Title, a Deed of Conveyance is drafted by him or her and approved by the seller's solicitor.
Your solicitor makes arrangements for searches to be made against the seller to ensure that there are no judgements lying against the seller (for example, bankruptcy or sheriffs' searches). Your solicitor should also conduct a search where the title to the property is held (either in the Land Registry or the Registry of Deeds) to ensure that there is nothing adverse attaching to the property, for example, an outstanding mortgage.
Once the Deed of Conveyance is approved by the seller's solicitor, your solicitor will contact your mortgage provider to request the issue of the approved loan cheque. This is the remaining balance of the purchase price. It is paid to the seller's solicitor and all documentation, and keys to the premises are handed over to your solicitor.
After the sale is completed
Once a sale is completed, your deeds, showing the new ownership details and mortgage details, if relevant, must be registered with either the Registry of Deeds or the Land Registry. The Property Registration Authority is responsible for both systems of registration.
Your solicitor will continue to assist you with finalising the deeds to your house with the Property Registration Authority. This can take months to years to complete. Even if it does take a long time you are still the owner of the property and if you wish you can sell the property before registration is complete.
There are many things to do when moving house, for example, redirecting your post and changing your details on the electoral register. More information is available in our document on moving to a new home.
Selling your Home
How do I sell my house?
There are two ways to sell a house – by private treaty or by auction. It is important to be guided by an auctioneer or other professionals in the area as to the best way to sell your particular house. Which method is the better will depend on a number of factors including the type of house, the state of the property market, the area etc. This is why it is best to consult a professional in the area to see what the best option is for you. No matter what method you use it is essential that you notify your solicitor of your plans to sell the house so that he may prepare the title documents and the contract for sale.
Do You Have a Mortgage?
Most houses these days have mortgages on them. If your house still has a mortgage on it you will need to give authorisation to the solicitor to take up the title deeds from the lending institution in order to prepare the contract for sale. It is important to do this as early as possible to give the solicitor time.
Preparing the Contracts for Sale
The Contract For Sale is drawn up once the solicitor has received all the relevant documentation from you and the lending institution. If the solicitor is preparing contracts for a sale by auction he/she just leaves the purchaser and purchase price blank until the auction is over and the purchaser is then known. Obviously, before the auction, the prospective bidders will want to check the title documents before the auction. If the sale is by private treaty the contract will contain all names including the purchase price.
Any house built since the 1st October 1964 requires planning permission. The solicitor will need to make sure that the planning documentation is in order. This will usually entail an architect’s certificate stating that the conditions of the planning regulations have been complied with. If there has been any development on the property a similar approval will be required. It is very important that the planning documents are in order before the proposed sale. Otherwise, the potential purchaser may, on discovery of a discrepancy, pull out of the transaction at a very late stage.
Selling the Family Home.
If you are selling your family home, even if it is in only one of the spouse’s names the consent of the other spouse is required. This is required under the Family Home Protection Act 1976. If both names are on the deeds then the problem does not arise, as both their signatures are required anyway. On completion of the sale of the Family home, both spouses will have to sign a Family Home Protection Act Declaration. You will also have to produce a copy of your State Marriage Certificate.
Signing Contracts and Closing
The first stage of the contract process is when your solicitor sends contracts and a copy of the title deed to the property to the purchaser’s solicitor for signing. He/she will then research the title and study the contract’s conditions and then advise his/her client as to any changes/issues that may be relevant. After these have been addressed he/she will then ask the purchaser to sign the contract and pay a deposit. The contract is then returned to the vendor’s solicitor who will call on the vendor to sign the contract in duplicate. One part is then returned to the purchaser’s solicitor who will then raise requisitions on the title, which have to be responded to by the vendor’s solicitor. The vendor’s solicitor will prepare the documents for closing and if there is a mortgage he will obtain redemption figures from the lending institution. The vendor (and spouse if necessary) will then sign the closing documents and declaration, if necessary. On closing, the vendor’s solicitor will meet the buyers and exchange the keys to the property, which the vendor will have given him/her, for the purchase money.
Buying and Selling at the same time
This can be quite a tricky area if you are trying to juggle both to happen at the same time. It is very important to consult your solicitor in this area, as they will have experience in such matters. It is usually best to first get a binding contract for the purchase of the new house. You may want to sign the contract for the purchase of the new house contingent on the sale of your old house going through. It is not essential that both closings be on the same day, as things can go wrong at the last moment.
Selling a House and Taxation
If you are selling a house, which is not your main residence, then you must pay Capital Gains Tax. If the property is your main residence then you are not liable for Capital Gain Tax. Again your solicitor will advise you as to the amount that you will have to pay to the Revenue Commissioners. It will depend on the value of the house. Whether or not it is your main residence your solicitor will have to get a Capital gains Tax Certificate for the purchase price if the purchase price is greater than the threshold set by the Revenue Commissioners. You will also have to give your P.P.S. number to the solicitor.