Buying your first home can be a daunting and exciting experience. Cahir & Co Solicitors are happy to assist you and guide you through the process.
If you are a first time buyer there are some considerations you need to focus on prior to entering into any binding contract. “All too often first time buyers underestimate how important it is to focus on the early stages of buying or building their first home” said Avril Collentine Property Solicitor at Cahir and Co. Avril went on to say that planning investigations, contract enquiries on Title produced and understanding funding supports and mortgages available prior to entering into a high binding contract are paramount. “Competition in the market is high so preparation is key” said Collentine.
Finance
Once you have decided to buy your first property you will need to ensure that you have sufficient savings and that all important mortgage approval. Most Auctioneers require confirmation of funds before allowing you to view and bid on properties. If you are intending to get a mortgage we would suggest that before you go house hunting you should engage with your mortgage lender to ascertain the extent of the mortgage which will be offered to you and the likely conditions attached to the loan. As you are a first-time buyer, a 90% limit will generally apply to the mortgage you can get. This means you will need a minimum deposit of 10% savings. The cost of buying is more than the asking price and therefore you should ensure you have sufficient funds to cover the costs which will include solicitor professional fees, survey fee, stamp duty @1% of the purchase price and land registry fees. I would recommend contacting us as soon as you start viewing properties so we can explain the process and provide you with an estimate of the costs involved. This will enable to establish that all important relationship and ensure a smooth conveyancing process. At Cahir & Co we are happy to take you through the process step by step and guide you to your first home.
All First time buyers should carefully consider the help to buy scheme and whether this is something they can avail of.
The Help to Buy (HTB) incentive is a government initiative to help first-time buyers get a deposit for a newly built house or apartment. It allows you to claim back tax that you have paid in Ireland the last four years. The scheme is specifically aimed at encouraging the construction of new homes, and is available to first-time buyers only. If you are buying or self-building the property with another person , they must also be a first time buyer. The Scheme is limited in that it only applies to new builds and therefore first time buyers buying second hand houses cannot avail of the Scheme. You must live in the house for 5 years from the date it is habitable. The maximum relief available was temporarily increased as part of the stimulus package and this is in place until 31 December 2021.
Pre Contract
When you have located your dream home and your offer has been accepted and you are termed to be sale agreed on a property. This is effectively you have agreed to buy the property subject to survey and subject to loan approval. At this point the Auctioneer will request that you pay a booking deposit. Paying your booking deposit is a strong signal to the estate agent that you intend to buy the property. The booking deposit is usually be 1.5 % -2% of the overall price. This is fully refundable in the event you chose not to proceed. At this point you will have to provide details to the Auctioneers of the solicitors acting on your behalf. This is now the time to instruct your Engineer or Architect to carry out a full structural survey on the property.
Once your offer is accepted, the estate agent will prepare a document of sale details and send this to the seller’s solicitor and to your solicitor. This document contains details of the price, conditions of the sale, the estimated closing date and the names and addresses of all those involved in the sale and if any contents are included.
If you are obtaining a mortgage you will already at this stage have approval in principle secured. Once you have gone sale agreed and your offer is accepted by the vendors you will need to provide your Bank with details of the property you intend to purchase and your solicitor contact details so that the Bank / Lending Institute can issue the letter of offer and loan pack to your solicitors.
You Bank will require a valuation on the property and the valuation report will be completed by an approved valuer from the Banks panel. .It is important to note that this is a valuation and not a structural report that you can reply on. Lenders will advise borrowers to get a survey for their own protection .
Importance of a Structural survey
We strongly recommend that you arrange a full structural survey to be carried out by a reputable engineer/ Surveyor when buying a second hand property. A New build is treated slightly different in so far as there will be a building agreement and contract for sale and the purchaser will have certain rights in respect of the standards and finishes. When buying a second hand property you should contact a qualified architect / engineer or surveyor who has experience in carrying out property surveys and engage their services .. A survey is one of the most important items on your checklist as this is most likely the largest financial purchase of your life. Therefore it is important to spend the money getting a proper and comprehensive survey which could save you a lot of money in the long term. The principle of caveat emptor or buyer beware applies and therefore you should arrange to have a full comprehensive survey carried out which will deal with the main structure, including roofs, walls and finishes both internally and externally. All prospective purchasers should bear in mind that the vendors are under no obligation to disclose any physical defects so you should carry out full checks on every aspect of the property such as access and services namely water, septic tank and percolation areas. When arranging the survey it is worthwhile to request the surveyor to compare the map from the title deeds of the property being purchased with the actual property on the ground. This will ensure the boundaries correspond. If you are buying an apartment the survey required will slightly differ from that of a stand-alone one off property. Crucially the written report will confirm the condition of the property and that it has been built in accordance with the Planning Permission and the approved plans.
Once your solicitor receives the Contracts and vouching title documents from the vendor’s solicitors they will investigate title and ensure that there is good marketable title. They will raise a number of enquiries and raise any issues which have arisen on the structural survey. It is important to remember that your solicitor must ensure that the title is good and certify to the Bank that all planning matters are in order. The solicitor is solely responsible for investigating the title and certifying to the Bank it is in order. If any issues arise as they sometimes do regarding septic tanks, or rights of way or extensions / alteration to the property which did not have the benefit of planning this will inevitably slow down the process. The old saying the day you buy is the day you sell is important to bear in mind. In other words, if the title is not in order when you purchase the property you will experience the exact same difficulties when you try to sell or remortgage. So it is vital all checks and investigations are carried out prior to signing contracts.
It is important that the title being purchased is a good marketable title with no issues which will affect resale.
Contracts
Once the solicitor is satisfied with all the pre contract enquiries and investigations they will arrange for you to attend and sign Contracts and usually the Loan offer if you are obtaining a mortgage. On signing Contracts a 10% deposit is payable by the purchaser. From this you can deduct the booking deposit already paid to the Auctioneer. Your solicitor will return the Contracts in duplicate together with the deposit to the vendor’s solicitors. The deposit is held by the vendor’s solicitors as stakeholder pending completion. Once the vendor signs with his solicitor one part Contract will be returned and at this point a binding Contract in place.
Avril Collentine Property Solicitor at Cahir & Co specialises in Land Transfers, Title investigation and Conveyancing. Supporting residential property buyers and sellers throughout Co Clare virtually and in person, Avril’s success is noteworthy. Call Avril on 065 6828383 or book an online consultation for advice or to discuss your individual property needs.
