The A-Z of Buying Property in Ireland
The A- Z of buying a property in Ireland
By Breffnie O Kelly. Licenced Buyer’s Agent
The property is advertised for sale by an estate agent on one or both of the main Irish property portals: which are www.myhome.ie and www.daft.ie
↓
The estate agent and the property seller will be hoping and expecting to sell the property for about 5 - 10% more than the asking price. This is standard enough practice in the Irish property market.
↓
Buyers come to view the property both in person and online.
↓
The property sales process is in effect, a slow motion auction eg. if a buyer is interested in a property, the buyer places a “bid” on the property. Let’s say a property is for sale asking €495,000, a typical starting “bid” might be €480,000. Then, as more and more buyers are interested in the property, each buyer places a “bid” on it. In general, each bid placed is higher than the previous bid
↓
After a week or two of the “bidding” process, the estate agent usually accepts the highest bid from the highest bidder. The property is now considered to be “sale agreed”. At this point, there is nothing legally binding either the seller or the buyer. It is simply an agreement in principle.
↓
The estate agent asks the buyer for a booking deposit of approx 3% of the property value. This deposit is paid as a sign of good faith and is fully refundable at this stage.
↓
The buyer usually gets a structural survey done of the property
(Typical cost €400 - €1000 depending on size of property)
↓
The buyer’s bank (if buyer is borrowing) appoints an independent valuer to value the property.
Both survey and bank valuation should happen within 5 – 10 days of going “sale agreed”.
(The bank valuer fee is approx €150 and is paid by the buyer/borrower)
↓
The estate agent writes to the solicitors working for the seller and the buyer with details of the property being purchased, the amount it’s being purchased for, and an estimated closing date for the sale. This closing date is usually scheduled to be 8 weeks from the date of this letter, however in practice it is often 5 - 8 months from the date of the letter)
↓
The purchaser is likely to pay a solicitor approx €1500 - €4000 in fees depending on the complication of the title deeds and boundaries of the property being purchased.
↓
The seller’s solicitor prepares a contract for sale and sends this along with a copy of the title deeds to the purchaser’s solicitor.
↓
There are back and forth questions between solicitors for both parties. (I’ve seen this part of the process take up to 40 weeks – it can be as little as 3 weeks)
↓
The purchaser’s solicitor, invites the purchaser to sign a contract (usually subject to loan) and pay a further 7% of the total cost of the house. The buyer has now paid a total of 10% deposit. This is now non refundable (unless the vendor pulls out of the sale).
↓
The contract, signed by the purchaser, is returned to the seller’s solicitor straight away ( unless there is still some outstanding issue eg. a map / a document etc)
↓
The seller signs the returned contract (usually within a week of it being returned)
↓
The buyer conducts a final inspection of the property (to check that no windows are broken, no tank overflowing etc)
↓
Buyer’s solicitor transfers the balance of funds to the vendor's solicitor and the sale is closed.
The buyer will also pay a once off government tax to purchase the property at this point..
This tax is called “stamp duty” and is charged at the rate of 1% of the purchase price of properties under €1m and 2% of the purchase price of properties over €2m.
↓
The seller’s solicitor phones the estate agent to tell them that it is OK to release keys to the buyer.
↓
Buyer collects keys from the estate agent and takes possession of her new home.
