The purchase of a house and in particular your first home is an important event in a person’s life. In last week’s article the focus was on the sale of a house and in this week’s article the focus is on the purchase of a house.
As a Purchaser you will firstly have to identify all of the suitable properties that are available for sale in the area in which you wish to purchase. There are many factors that will influence your decision ranging from the purchase price, the type of house and of course its location. You will have to negotiate with an Auctioneer acting on behalf of the Owner/Vendor to reach agreement on the price once you have identified a house you would like to purchase. You should make your offer to purchase conditional on a letter of loan approval issuing from your lending institution.
The loan to purchase a house is also known as a mortgage. You should contact your lending institution advance of agreeing to purchase and ask for loan approval in principle so that you will know the how much of a loan you can get.
When a price is agreed the Auctioneer will request a booking deposit from you which should be no more than 5% of the purchase price of the house. A booking deposit is refundable on request.
You should then contact your Solicitor and give him/her all of the relevant details. Your Solicitor will recommend to you that you immediately arrange for the relevant letter of loan approval to issue from your lending institution so that the loan offer will be available as soon as contracts are received from the Vendor’s Solicitor.
When the sale price is agreed, the Solicitor acting for the Vendor will forward contracts and supporting title documents to your Solicitor. Your Solicitor will then arrange an appointment for you to call in to discuss those contracts. Your Solicitor will advise you on issues such as obtaining a structural report if it is a second hand house, review of the Building Energy Rating Certificate for the house and review of your letter of loan offer once received. Your Solicitor will also advise you on the stamp duty implications of your purchase. If you are a first time purchaser you will be exempt from the payment of stamp duty. If you are buying your second house to live in or if you are an investor you will need to check the position with your solicitor.
Once you have signed the contracts and once all conditions that your solicitor has inserted in the contract are complied with then you are bound to purchase the house. You will also be paying the balance of the 10% deposit on the signing of contracts which are then forwarded to the Solicitor for the Vendor. Once the Vendor has signed the contracts then there is a binding agreement to sell and you must complete the purchase on the agreed date. Should you fail to do so then the Vendor can forfeit your deposit and sue you for breach of contract. If the Vendor fails to complete, you can also sue for breach of contract.
Once contracts are signed and exchanged, your Solicitor will apply to your lending institution for your loan cheque. Your Solicitor will also raise a series of queries about the property known as Requisitions on Title and will advise you of the replies. On the closing date your Solicitor will arrange for the balance purchase monies to be transferred to the Solicitor for the Vendor who in turn will then forward the closing title documents to your Solicitor. The keys to the house are usually available from the Auctioneer. It is on the closing day that ownership of the property passes to you.
Your Solicitor will arrange the stamping and registration of the title deeds in your name and will forward all of your title deeds to your lending institution to be held until the mortgage is repaid. On average the process takes between 4 to 6 weeks from the date contracts are signed but as stated in last week’s article, be warned, delays are unfortunately all too frequent!
-Mary Walsh
Representing you…Protecting you
