Purchasing a property

Finance

The first step in buying your home is deciding how you want to finance the purchase. Depending on your personal circumstances you might be in a position to proceed by way of a cash purchase, alternatively you might proceed by way of residential mortgage. Whichever route works best for you, C.G. Gilmartin & Co are here to assist.

Mortgage Approval

Should you decide to proceed by way of residential mortgage you will need to engage a mortgage broker or you can contact the lender directly yourself. As with most financial products you will need to provide your broker/lender with the following:

• ID e.g. passport/ driver’s licence

• Bank statement, usually 6 months

• Proof of address

• Salary certs, usually 3 months

If you are applying to a lender that you already hold accounts with, the process is usually more streamlined as your lender will be able to access your account information without requiring you to order additional statements. Please note that depending on the passage of time since you last updated your ID documentation with your lender, further up to date copies may be requested.

In completing your mortgage application, you will be required to consent to an ICB check. This allows the bank to check your credit history (with the Irish Credit Bureau) to see whether or not you have any outstanding loans and whether there were any missed payments.

Once you have completed the application and provided all of the requested documentation your mortgage application will be assessed. Your lender may provide you with what is known as “Approval In Principle” commonly referred to as AIP. This is usually indicative of the amount that you may be approved for and sight of this approval will often be requested by selling agents when you enter the bidding process.

Choose your property

Once you have identified the property you wish to purchase you can liaise with the selling agent to place an offer on that property.

It is worth noting that in the current market, most properties are subject to considerable interest by the buying public, and as such it is likely that you will encounter a bidding process with several interested parties. While it is understandable that you might form an attachment to a property you are bidding on, it is imperative that you carefully consider the below purchase costs when determining your bidding ceiling:

• Purchase Price

• Surveyor Fees

• Property Valuation fees (if purchasing with a mortgage)

• Searches

• Local Property Tax

• Service Charges (if applicable)

• Stamp Duty

• Registration Fees

• Solicitors Fees

• Renovation Works

• Furniture and Sundries

If your offer is accepted, you pay a booking deposit to the selling agent and provide them with your solicitor’s details. You should also contact your mortgage provider and furnish them with the address of the property you are buying, the purchase price, and your solicitor’s details so that they can proceed to issue your loan pack.

The selling agent will then write to your solicitor providing a Sales Advice Note which will detail the purchase price, address, and vendor’s solicitor details. At this juncture your solicitor will write to the vendors solicitor to confirm they act for you in the purchase and to request the contracts and vouching title deeds for review.

Contract for Sale

Once received your solicitor will examine the contracts and title deeds to ensure that the vendor has good marketable title to sell to you and to ensure that there are no unreasonable special conditions in the contract, by way of pre-contract enquiry.

Your solicitor will also negotiate any special conditions into the contract which you may require, e.g. if you are applying for a mortgage the special condition would be inserted to state that the contract is dependent on the purchaser being granted mortgage facilities from his/her lending institution, or sale of your existing property completing.

Once the terms of the contract have been agreed to your satisfaction, your solicitor will arrange for you to sign contracts for sale and together with the mortgage documents, and highlight any relevant details or considerations needing resolution prior to completion of the purchase. Your solicitor will then proceed to return signed contracts to the vendor’s solicitor with the balance contract deposit (usually 10% of the purchase price less the booking deposit paid to the selling agent).

The vendor’s solicitor will then arrange for their client to sign the contracts and will return one part fully signed and dated contract to your solicitor. Once contracts have been countersigned by the vendor and the deposit accepted there is a binding agreement in place from that date and you have an equitable interest in the property. You should consider insuring the property from this date.

In Advance of Completion

The closing date noted in the Contract for Sale will provide an indication of when the sale is intended to complete, however, for a myriad of reasons this may not be the actual date the sale completes.

In consultation with the vendors solicitor and in line with the closing date noted in the contract your solicitor will liaise with you in respect of completion funds. They will provide you with a completion statement outlining the balance funds required to be lodged into their client account prior to completion. Please note that your solicitor will require the balance purchase price less mortgage funds (if applicable), the stamp duty, registration fees, third party outlays (searches etc.) and their professional fees to be paid before they will be in a position to complete.

Once your closing date is confirmed your solicitor will discuss drawing down the loan monies from your lender.

The request for funds is generally noted with the drawdown date being 2-3 days prior to the closing date to facilitate the flow of funds to the vendors solicitor. It is important to note that the date of drawdown will be the date applicable for the purposes of triggering your loan repayments with your lender (depending on where your repayment mandate date falls).

Closing

On receipt of the loan monies form your lender and the balance completion funds from you, your solicitor will arrange to transfer the balance purchase price and any relevant apportionments of LPT or service charge to the vendors solicitor in trust, and on receipt of same the vendors solicitor will arrange to forward the completion documents to your solicitor in trust ending completion of the sale.

Your solicitor may discuss with you a final inspection of the property with the selling agent prior to closing (usually the day before or the day of closing) to confirm that there have been no changes to the condition of the property since your initial viewing and confirming that the property is vacant and in good order to complete. When in receipt of the completion documents, and following a review of same, your solicitor will confirm with you that the final inspection was in order and that you are satisfied to complete.

Once they have your confirmation in hand they will arrange to raise a set of closing searches against the vendor and the property. These searches are carried out by a third-party service provider to ensure that the vendor is not bankrupt (a bankrupt person cannot sell a property), insolvent, and that there are no judgments or undisclosed mortgages or burdens registered against the property. Your solicitor may also carry out a further planning search at this juncture to confirm that there have been no updates to the planning status of the property or the surrounding area since your initial survey and planning searches were conducted prior to exchange of contracts.

Your solicitor will forward the searches to the vendors solicitor for explanation, and if the explanations returned are in order, your solicitor will confirm that the sale is now complete, that funds can be released to the vendor, and the vendors solicitor will confirm that keys can be released to you and you can take possession.

Congratulations you just purchased a property!

Post Completion

Stamp duty

Your solicitor will arrange to discharge the stamp duty payable on your deed. Stamp duty is currently at 1% of the purchase price of a residential property up to €1 million, 2% on the value between € 1 million and €1.5 million, and 6% on the remaining value. Stamp duty should be discharged as soon as possible from the date of completion and Revenue provide for 44 days to file a stamp duty return before interest and penalties will apply. Your solicitor will pay the applicable stamp duty through revenue online and a stamp certificate will be generated to confirm payment and facilitate registration of the property into your name.

Registration

Your solicitor will arrange to register your ownership and mortgage (if applicable) together with any rights of way or easements acquired during your purchase process with Tailte Eireann once your Deed has been stamped. Depending on whether your property has been previously registered with Tailte Eireann, or whether same is subject to an application for First Registration, different timelines will apply for completion of the application, however, your solicitor will advise you further of these timelines during the purchase process.

Your Deeds

Once your registration completes if you were a cash purchaser, your solicitor will liaise with you as to where your title deeds for the property should be stored for safekeeping. If you have purchased with the benefit of a mortgage your solicitor will forward your title deeds to your lender together with a Certificate of Title to be held by your lender as security for your mortgage, until such time as your mortgage has been repaid in full and return of deeds is requested, or alternatively, your solicitor can apply to take up your deeds form your lender on Accountable Trust Receipt pending sale or remortgage of your property. Please note that taking your deeds up on Accountable Trust Receipt is subject to administration fees from your lender circa €63-150.

At C.G. Gilmartin & Co. we know that purchasing a property is one of the largest single financial transactions you will ever be engaged in, and as such you should feel confident that the solicitors acting on your behalf have the knowledge and professional experience to protect your interests. We know this can be a stressful and emotional process for all parties, and because of this we believe in clear and consistent communication with our clients throughout the process, keeping you appraised of the progress of your purchase at all stages.

For further information or to arrange to book a consultation please feel free to contact us by phone on +353 01 914 4359 or use the contact form below.