The legal process involved in house buying takes time and money
You’ve found the home of your dreams, secured the funds to buy it and had your offer accepted. Now it’s time to go legal. The next step is to engage a solicitor to do the conveyancing which is the legal work involved in transferring ownership of the property to you. Once your offer is accepted, subject to survey, the property becomes “sale agreed” and you will need to pay a booking deposit to the estate agent. The estate agent prepares a document of the sale details and sends it to both the seller’s solicitor and to yours. In most documents the seller will be called the vendor. It includes the price, conditions of sale, names and addresses of both parties and an estimated closing date, which is the date on which ownership of the property will transfer to you.
The vendor’s solicitor will send the contracts for the sale of the property, with a copy of the Title Deeds – the legal documents showing ownership of the property – to your solicitor.
Your solicitor’s job is to make sure you become the registered owner of the property, and that your lender’s interest in the property, the mortgage secured on it, is registered in the form of a “charge” on the property.
In recent years the price for this work has fallen, with some solicitors advertising a flat fee of €1,000 plus VAT. However, the final figure will always be higher as additional costs for telephone calls, search fees and registering deeds are factored in.
Your solicitor organises “searches” on a property to ensure you don’t inadvertently take on any liabilities already attached to it. Land Registry fees vary, between €400 and €800 depending on the price of the property and whether it has been registered before. The cost to register a mortgage is €175.
Typically within three weeks of going sale agreed you will pay up to 10 per cent of the purchase price, less the booking fee, to your solicitor, who will arrange to have it paid to the seller through their solicitor.
Your solicitor, having checked that the contracts are in order, will have you sign two copies before returning them to the seller’s solicitor. At this point you have legally agreed to buy the property.
Once the seller signs and returns one copy of the contract to your solicitor, they have legally agreed to sell it to you. Both solicitors then agree a final closing date before which you have to pay the remainder of the money.
The period between exchange and completion generally takes six weeks (although this can vary greatly) enabling the buyer put finance in place and the vendor to pack up and move out.
There are pitfalls that can slow the process down. To draw down your mortgage cheque, you must have mortgage protection insurance in place. This is a life assurance policy that pays out in the event of your death. Securing it may take longer than you expect, particularly if you have had previous health issues. Your lender will also demand you have home insurance in place.
Once done, your lender will issue the mortgage cheque to your solicitor. He or she will then arrange to have the funds transferred to the seller through their solicitor.
Stamp duty of 1 per cent (for a property up to €1 million) must also be paid. Your solicitor will arrange for this but you also need to have that money in place in time for the closing of the sale.
The formal completion of the purchase takes place at the seller’s solicitor’s offices where your solicitor will represent you. Assuming everything is in order and the funds have been transferred to the seller, the keys are handed to your solicitor, who will then hand them over to you. Congrats – you’re home.