What happens when I buy a house?: A step-by-step guide that aims to take the mystery out of conveyancing.

Pay a booking deposit

The first step, once you have found your house or apartment, is to pay a deposit to an auctioneer. This deposit is refundable in full if you change your mind later. It will trigger the issue of Contracts to your solicitor…

The Contracts

The key information in the Contracts is the “title information”, which explains who owns the property, how the ownership is registered, and who is selling it. Your solicitor will let you know whether any additional steps need to be taken to make sure that ownership will effectively pass to you, and whether the Contracts reveal anything else of interest. Before you return signed Contracts, you will need to make sure the house is sound….

Engineer’s report

Any prospective purchaser should have the property inspected by an engineer. The engineer will conduct a structural survey of the property for you, to see whether, as far as they can tell, the property is structurally sound. This is an important step to take; an engineer won’t be able to use x-ray specs to look into the walls or the foundations of your house, but they will be able to see whether there are any obvious structural faults like subsidence etc that you need to know about now. It is also a good idea, in many cases, to have the engineer inspect the boundaries of your property at this stage also. The engineer would compare the map attached to the property to the boundaries, walls and fences that are actually on the ground, to confirm whether the map is correct. This can help to prevent any future possible disputes about boundaries.

The mortgage

While all of this is going on you may be dealing with your bank with regard to a mortgage. If you have received a written loan approval, you will meet with your solicitor to sign the loan approval documents. Your solicitor will also provide their undertaking to the bank, promising the bank that they will register your name as owner of the property and that they will also registered the bank’s interest. Once these documents have been referred to the bank by the solicitor, you will need to go about organising matters such as house insurance and life assurance, which will need to be in place before the bank will release the funds to your solicitor.

Frustrating delays!

At this stage you may find yourself dealing with an issue that has arisen. If the engineer has identified an issue with the house, such as a leaky septic tank, or a discrepancy between the map and the boundaries, this is the time when you will be negotiating with the vendor to try and sort this out before you proceed.

Likewise, your solicitor will, at this stage, be dealing with any issues that have become apparent on foot of the Contracts. It is your solicitor’s job to make sure that you will become the registered owner of the property. So, if there are any problems with the title that need to be resolved, this is the time when those will have to be taken care of.

Finalising your budget

You will also be clarifying your budget; by now your solicitor will be able to calculate with more precision exactly what your overall costs will be. At this stage, you will probably have to transfer some funds into your solicitor’s client account, so they can get ready to proceed for you. In due course, when the mortgage funds have been sent to your solicitor (“drawn down”), the solicitor will have enough money in their client account to buy the house for you, to pay your Stamp Duty, register it in your name, and to deal with the other costs and expenses that arise on your behalf. At the end if there is anything left over, your solicitor will send that to you. (Read more about conveyancing budgets here.)

Returning signed Contracts

Once any issues have been ironed out, and once you are sure you will have enough funds to proceed to purchase the property, your solicitor will return the signed Contracts to the vendor’s solicitor. You will also pay the balance of the 10% deposit. This consists of 10% of the total purchase price, minus what you have already paid the auctioneer. So, in a typical transaction for a house worth €250,000.00, you might pay a sum of €7,000.00 to an auctioneer. On signing the Contracts you would then add another €18,000.00, so that the purchasers have now received 10% of the purchase price from you. Once they have been signed by the vendor and are returned to you, each side is then bound to complete the transaction.

Your solicitor will also send something called “Requisitions on Title” to the vendor’s solicitor. This is a series of questions about the property, which the vendors will answer and return to you. By now your solicitor will probably know the answers to all the important questions, but the return of signed Replies to Requisitions after the Contracts have been exchanged makes the answers binding on the vendor so this is an important safety measure that is taken as part of the transaction.

Searches

Next step is for your solicitor to arrange a date on which to complete the purchase for you. On the morning of the closing date, your solicitor will conduct “searches”. The searches may involve sending somebody to physically go into the Registry of Deeds to make sure no transaction has taken place with respect to the property that your solicitor isn’t aware of. More commonly, the searches are conducted online and they involve checking things like the registers of judgements, and of bankruptcies. This is to ensure you don’t inherit anyone else’s debt; so, for example if a debtor is the subject of an order from a court in respect of a debt that he or she owes, and if the debt has been registered as a judgement mortgage, this means the debt is now attached to the property. Obviously if anything like this shows up at the last minute the vendor will have to explain it. In rare cases this may come as a surprise to everybody, and you may have to wait until a debt has been paid before the transaction can complete. More usually, there is nothing to be alarmed about in the search results.

Getting your keys!

All going well, your solicitor will pay the balance of the purchase monies to the vendor’s solicitor, in exchange for which they will receive the signed Deed or document that transfers the property to you and any other key documentation associated with the property… and you will get your keys.

Registration

Your solicitor will then pay the stamp duty of 1% for you. They will also register the property in your name. This can be a quick or slow process depending on the way the property is registered…but that’s a whole other story, and one that I may deal with on another occasion.

Once the property is registered in your name, your solicitor will send you out confirmation of that fact. Nowadays this means you will receive something called a “Folio”. This is a simple three or four page document that states who the owner of the property is, and whether a mortgage or any other “burdens” are registered against the property. It is now compulsory for every property that changes hands to be registered in such a way that a Folio issues, so you will have the satisfaction and reassurance of seeing your name in black and white and of knowing that you are indeed the owner of your property.

Needless to say, I’d be happy to take care of all of this for you, and hopefully to make the process as clear and straightforward as possible. Happy house hunting!

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Principal, Claire McCarthy Solicitor

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