Guide to buying a home
Buying a home is one of the most significant transactions that a person will make in their lives.
Most Clients tell us that they are familiar with the steps that they need to take at the outset including:
a. Dealing with a broker or lending institution to obtain a loan offer.
b. Searching for a property and negotiating the purchase price with the estate agent.
c. Paying a booking deposit to the estate agent.
d. Notifying the estate agent and the mortgage bank of the identity of their solicitor so that their solicitor will receive Contracts, Title information and a loan offer.
However, at that point Clients generally find themselves in unfamiliar territory as the legal process takes over and matters are dealt with by their solicitor.
The average transaction from receipt of contracts can be approximately 6 weeks and it is very important to engage the services of a solicitor as soon as possible when you intend to purchase. It is also important to have an understanding of the steps that will be taken during that timeframe and confidence that your solicitor will communicate regularly with you, advise you appropriately and complete the transaction in as prompt and efficient a manner as possible.
The total cost of purchasing of a home involves not just the cost of the property but also government taxes, property registration fees, legal fees and other expenses such as survey fees and insurance. At the outset, we can provide you with an estimate and understanding of the total legal fees, taxes and charges involved in purchasing your home.
The legal process of buying a home can effectively be broken down into three stages, namely:
b. Contract to Completion and
c. Post Completion.
A brief overview of each of these stages and the role of both the purchaser and the solicitor at each of these stages is as follows:
At the Pre-Contract stage, the purchaser will have agreed terms with the estate agent and will have paid a booking deposit. If the purchase of the home is to be facilitated by a mortgage, then loan approval must be obtained in advance of any contracts being signed. The purchaser will have to deal with any conditions of the mortgage such as obtaining life insurance.
The solicitor will advise you to arrange for a structural survey to be carried out. If you are buying your home with a co-purchaser or with your spouse, the solicitor will advise you of the various forms of legal ownership of property (e.g. joint tenancy/ tenancy in common), the ownership rights that these other parties will have and will discuss with you whether you may wish to put in place a co-ownership agreement or will when dealing with the purchase of the property.
Once these preliminaries have been carried out, the solicitor will receive copies of the contract for sale together with initial title deeds for the property from the vendor’s solicitor. Once received, the solicitor will then examine the contract’s terms and property’s title documents.
The solicitor’s role is to ensure that the title to the property you are purchasing is a “good marketable title” so that there should be no issues that might affect the future sale of the property when you decide to move on. At the outset, the solicitor will be able to advise you whether there might be any issues with the title of the property that you intend to purchase.
Having consulted with you, it may be decided that more information is required so pre-contract enquiries may be sent to the vendor’s solicitor. There may also be terms in the contract that neither you nor your solicitor are happy with. If this is the case, then your solicitor will make the necessary changes to the contract, having consulted with you and will highlight these to the vendor’s solicitor. In the event that the replies received regarding the pre-contract enquiries are satisfactory and the vendor is willing to accept the changes to the contract, then the vendor’s solicitor will incorporate these changes into the final draft of the contract and two copies of the final draft will be sent to your solicitor for your signature.
At this point the purchaser should have obtained loan approval and the solicitor will provide an undertaking (a binding professional promise) to the lending institution that after the purchase is completed they will certify that the property has good marketable title and ensure that the purchaser and the lending institution’s interests in the property are registered with the Property Registration Authority. The solicitor will also arrange for the purchaser to sign the Loan Offer.
The solicitor will order pre-contract searches and if these are satisfactory, the purchaser will now be in a position to execute (sign) the two copies of the contract. The two executed contracts together with a cheque for the deposit (typically 10% of the purchase price minus the booking deposit paid to the estate agent) will be sent to the vendor’s solicitor. The contract is not binding until the vendor has signed one copy and it has been returned to your solicitor.
The Contract to Completion stage begins when the vendor has signed both of the contracts and returned one of the signed contracts to your solicitor.
The solicitor will advise you at that stage to have the property insured as you now have a formal interest (the beneficial interest) in the property.
The solicitor will now receive from the vendor’s solicitor the rest of the title documents relating to the property and will then examine the full title of the property, and will raise any objections (if any) on the title and a standard set of detailed queries known as requisitions on title.
If the solicitor receives replies to the requisitions on title that are satisfactory, then he/she will draft the Purchase Deed and it will be sent to the vendor’s solicitor not less than four days before the date the sale is due to complete (this is known as the closing/ completion date).
Prior to the closing of the transaction, the solicitor will seek confirmation from you that you have fully complied with all the conditions that attach to your loan approval and will then obtain the loan funds from the mortgage bank and order any closing searches.
On the day of the closing, your solicitor will visit the vendor’s solicitor’s offices and hand over the balance of the purchase monies. The vendor’s solicitor will give him the deed that has been signed by the vendor, any completion documents and the keys to the property or an authority from the vendor directing the estate agent to release the keys to the purchaser.
After closing, during the Post Completion stage, your solicitor will give you the keys to the property and will also arrange for you to execute the purchase deed and the mortgage.
The solicitor will then arrange payment of any stamp duty that may be payable on the deed and will furnish you with a copy of the stamp duty certificate confirming payment has been made.
The solicitor must then arrange to have the purchase deed and the mortgage deed registered with the Property Registration Authority. You should be furnished with a dealing number confirming that these documents have been lodged for registration. The registration process itself is not within the control of your solicitor and can take a matter of weeks, months or years. Ultimately, once registration has completed you should be sent a copy of either (a) the Land Registry folio noting the fact that you are the registered owner or (b) the purchase deed stamped as registered with the Registry of Deeds. The solicitor will then have to send a certificate of title and all original title documents to your lending institution where they will be kept until such time as the mortgage is repaid in full or you decide you wish to sell the property.
Please contact us on 01-6445777 or through our online enquiry form for a conveyancing quote.