Buying a House
Buying a house can be very exciting particularly when it is your first house but you have to be careful not to be carried away. Making a successful purchase involves quite a lot of planning. If you are buying your first house just be very careful, don’t go overboard and don’t be too romantic. Before embarking on the project we would ask you to consider the following:
1. Even before you start looking for a property try and get your loan approval first. Go to your bank, give them all the information they require and see how much you can borrow and over what period. You must carefully consider interest rates and whether they are fixed and of course the period of the loan.
2. Very shortly after getting your loan approval you should select a solicitor to take care of the purchase and the title. Shop around to get the best price and ascertain not only the solicitor’s fee but all items of outlay as well. For instance, there will be such items as Land Registry fees, stamp duty, searches and other expenses. Don’t select a firm of solicitors just because they are the cheapest. Whoever you do select be sure you are getting the benefit of a fully qualified solicitor to handle your file as opposed to a trainee or a legal executive. Many firms offer you a very good deal but you don’t get the benefit of a fully qualified solicitor. This is very important.
3. When you know how much you can borrow and when you know how much it will cost to deal with the legal process then you will have a very good idea of how much money you have to put up yourself.
4. Now you get to the most difficult bit. You have to find a house within your budget. Lots of things need consideration – for instance how far is your house from your job, how far is it from your family, is it a good neighbourhood, where are the schools, where is the public transport, is it on a flood plain or near a river, is it near the sea. All of these factors are relevant to varying degrees. We mention rivers and the sea in particular since we are going through a period of climate change. You are probably buying for the long haul and you want to avoid, if possible, a situation where your home may become flooded. If you are insured the insurance company will take up the financial aspect but putting the property back to its original state will give you a huge amount of heartache and inconvenience. Furthermore a property once flooded will probably be flooded again. This will render it difficult and expensive to get adequate insurance cover. If you can’t get insurance cover then on the second occasion you will have to pay for all the damage yourself. Furthermore you will find it very difficult to sell the property in the future since an incoming purchaser who cannot get insurance against flooding won’t be able to get a mortgage. So watch how close you are to water, be it the sea or a river and if you near either of these check out on insurance and check as to whether there has been flooding in the area. Another important aspect to consider is the orientation of the house. If you are buying in the winter months it mightn’t even enter into your head. It is nice however to have a west or south-westerly aspect in your back garden. This means you can enjoy those summer evenings with your barbeque. If you have a north facing back garden it will be cold at any time and the sunshine will probably be at the wrong side of the house.
5. Once you have found a property the auctioneer will probably ask you for a booking deposit. Generally they seek around €5,000 and this money is paid on a refundable basis. Be sure to get a receipt. The purpose of a booking deposit it to show that you are genuinely interested in the property and at this point the auctioneer will take the property off the market but you must remember that at this early stage neither the seller nor yourself are bound legally to go ahead. The auctioneer could come back to you and say that the seller has changed his mind and simply give you your money back. In a like fashion you can change your mind as well. If you see a property that you have fallen in love with therefore and still need to do a bit of investigation it can be a wise move on your part to put down the booking deposit and then carry out a lot of further investigation before you are legally committed. If it turns out that there is some particular problem about the property you can always withdraw but the advantage is that for a short period the property is technically but not legally sold to you. There are very few properties on the market at the moment and a big demand so the quicker you move the better and put down your booking deposit. Don’t dilly dally, get your receipt and then do your investigations.
6. The auctioneer will also ask you for details of the name and address of your solicitor and the auctioneer will then tell the solicitor for the seller to send out contracts to your solicitor. This is where you have the breathing space. You are not bound to purchaser legally at this point.
7. It can take anything up to a month for contracts to arrive at your own solicitor’s office. So you have all of this time to carry out your own investigations on the property, view the neighbourhood, arrange a valuation for you bank and arrange a structural survey. Once you have arranged your valuation you will need to send it to your bank and subject to the valuation being acceptable, the bank will send you on your official loan pack or it will go to your solicitor’s office.
8. When your solicitor is in receipt of the contracts, he/she will go through the title and ascertain that everything is in order. He/She will also recommend that you get a structural survey done on the property. You will also be made aware of the BER rating. When you buy a house the principal of “caveat emptor” applies so you buy a house as you find it. It is therefore absolutely vital that you get a full structural survey done. This is not an expensive process and generally costs less than €500. This is something you should also take into your budget. A structural survey can reveal all sorts of difficulties. There could be serious dampness in the property, there could be issues regarding planning permission and extensions. There could be dry rot etc. etc. etc. You should also arrange that your surveyor do a search in the planning office, or you can do it yourself, just to ensure that there won’t be any road widening, smelly factories or missile sites adjoining your property. You should be sure to check at the very start with your solicitor as to what contents are included in the purchase price. Once the valuation and structural survey have been done and you are happy and your solicitor is happy with the title, contracts are exchanged and there is a binding agreement. At this point you must buy the property and the seller must sell. A closing date is also agreed. When you sign the contacts you will normally be asked for a further deposit brining the total deposit to 10% of the agreed purchaser price. After signing of contracts, your solicitor will raise what are called requisitions on title and he/she will go through the title deeds and the title aspect in great detail. He/She will then requisition your loan cheque and when this arrives you will be asked for the balance of the funds necessary to complete the purchaser plus the legal fees and other expenses which you have negotiated with your solicitor earlier. He/She will then complete the purchaser and get your deeds. You will attend the office to sign the transfer and other documents. It is now time to move in to your new house. Before moving and parting with your money you should do a final inspection.
A word of caution. If you are buying from a reputable firm of auctioneers it is fine to hand over a booking deposit but if you are buying from an individual who is not represented by an auctioneer, you should under no circumstances hand over any money. Just get the name of his/her solicitor.
If you have any questions in relation to purchasing a house, please do not hesitate to contact John Glynn & Co Solicitors. If you would like us to represent you in any transaction, we will be happy to give you a quote.