7 Steps for Purchasing Property
Step 1 – Contact your solicitor and mortgage bank/broker
The steps for purchasing property are laid out here succinctly so as to allow you a smoother, faster and more cost effective purchase.
We would advise that you do this as soon as you begin the process of looking for a house to purchase.
Your solicitor will be able to spell out in detail the different stages and timeline involved and ensure that it all comes together in the right way – generally there will be no additional fee for this advice.
Your mortgage broker will be able to get your loan documentation started, as with all major financial institutions there are quite a few pairs of hands that your application will need to be passed through and as such beginning this process early will ensure it comes together on time. Again, generally there will be no additional charge for this advice.
Step 2 – Sale agreed
You have found the property you wish to purchase and placed your booking deposit with the Estate Agent. This is merely a statement of your intent and is fully refundable right up to the exchange of Contracts.
At this stage we would advise commissioning your independent structural surveyors’ report, particularly for second hand homes. Not only will this flag any major structural issues that may exist, it will also comment on any issues with regard to Planning/Building Bye Law and Building Regulations, e.g. extensions, widening of driveways, sheds/garages etc. Commissioning this survey at this stage will ensure that your solicitor will have the report in sufficient time to raise any important issues with the Sellers Solicitors Pre Contract. It is important to note that your bank will also have a survey carried out on the property however this is for their interest only and not yours, we would therefore always advise you to commission your own independent report. We would advise you to bookmark the page “7 Steps for purchasing property” to relate back to should any confusion arise.
Step 3 – Contracts and Title Review
The Sellers’ Solicitors are responsible for preparing the Contracts for Sale and furnishing copies of all the relevant Title Documentation (the originals are furnished on closing – see Phase 6). Based upon this and combined with a Planning Search and your Surveyors Report, your solicitor will raise Pre Contract Enquiries. Some of these will be template queries however the majority will be based upon the information to hand and the individual make up of your property. It is very important to receive satisfactory replies to all Pre Contract Enquiries raised before signing Contracts. Although the binding stage of the transaction does not arise until Contracts have been exchanged (see Phase 5), once you have signed the Contracts they are out of your control and as such you should consider this to be the binding stage of the transaction. You should ask your Solicitor to furnish you with a copy of their Pre Contract Enquiries as this will give you a great insight into any possible issues with your proposed purchase property.
Step 4 – Signing Contracts/Paying Balance of Deposit
Assuming satisfactory replies to Pre Contract Enquiries (see Phase 3) have been received together with the “Solicitors Pack” from your Lending Institution, your Solicitor will now seek to make an appointment for you to call into the office. At this stage we would ask for you to transfer the balance of deposit to our account (10% of the Purchase Price of the property, minus the Booking Deposit already paid to the Estate Agent, referred to in Phase 1). During this appointment the Contracts and Banking Documentation would be reviewed, explained and executed. The Pre Contract Enquiries together with the replies to same would be discussed as it is crucial at this stage that you are fully aware of the condition of the property you are purchasing, a common phrase used is “Caveat Emptor,” or “Buyer Beware.” As mentioned in Phase 3 of steps for purchasing property, once Contracts have been executed and sent to the Sellers’ Solicitors together with the balance of your deposit, you should view this as the binding stage of the transaction. Essentially this means that should you wish to pull out of the purchase you will unfortunately have to forfeit your deposit. The only exception to this is a Special Condition that we would add to the Contracts, a “get out of jail free card.” This “Subject to Loan Clause” ensures that should anything happen to your mortgage prior to drawdown, you would be entitled to rescind the Contract and walk away from the transaction without penalty.
Step 5 – Exchange of Contracts
As the majority of work is done Pre Contract ( see Phase 3 of the steps for purchasing property), your main focus should be on ensuring that your banking is in order and lined up to be drawn down by your solicitor when required (about 5 days before closing). The Sellers’ Solicitor will have his client(s) counter sign the Contracts and one part will be returned to your Solicitors’ Office (Exchange of Contracts). At this stage a closing date can be agreed as between the parties, this is usually about 2 or 3 weeks from the Exchange of Contracts. It is important that you notify your Mortgage Bank of the closing date as they will require this information for your Home Insurance. However your Solicitor will be unable to draw down your mortgage until your Home Insurance has been activated, therefore notify your bank of the closing date but request that the Home Insurance is activated immediately, this will ensure that your Solicitor can draw down your Mortgage in time to close (see Phase 6). It is also a good idea at this stage to ensure that any shortfall payment that you might be making is transferred to your Solicitor in order that this can be accessed in plenty of time to close.
Step 6 – Closing
Your Solicitors will ensure that they have drawn down your mortgage monies and received any shortfall sum from you ahead of the closing date. The steps for purchasing a property will mean The Balance of Purchase monies (90% of the Purchase Price) is transferred directly from your Solicitors’ Client Account into the Sellers’ Solicitors Client Account. On top of this Balance will be any Apportionment Funds that are applicable – e.g. Local Property Tax, Management Company Service Charge etc. The Seller will have discharged this for the year and essentially you are “apportioning” that which you owe for the remainder of the year. Your Solicitor will discharge this sum on your behalf and seek reimbursement from you post completion – of course this would be agreed with your ahead of time and the Apportionment Account emailed to you for approval. We would strongly advise that you undertake a final walk through of the property the day of or before closing, “Pre Closing Inspection.” This is to ensure no damage has occurred to the property over the previous weeks, that the property is clean, vacant and that all contents have been removed. The steps for purchasing property means you can arrange this directly with the Estate Agent. Provided you are happy, and once the Sellers’ Solicitor has received the balance of closing funds (together with any applicable apportionment monies) and your Solicitor has received the Original Title Deeds the transaction can close. These days keys are available for you to collect from the Estate Agent and the property is yours!
Step 7 – Post Completion
Your Solicitor will make an appointment with you to call in and sign the Deed. Stamp Duty will be discharged on your behalf and the file will be sent to the Property Registration Authority for registration. Once registration is complete your Solicitor should email you a copy of the “Folio,” this is essentially an automated blueprint of your property which will show you as the owner(s) and your bank registered as a burden. You should check this is in order and there are no spelling mistakes etc. Your Deeds will then be sent to the bank until you have either paid off your Mortgage or you decide to re mortgage.
If you have any further questions regarding the steps for purchasing property, please do not hesitate to call us at 01-454 0068 or email [email protected]
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