Tipp FM Legal Slot – 26th August 2014 – A Guide to Buying Property
On Tipp FM, Andrea Gleasure, Solicitor, spoke to Seamus Martin on “Tipp Today” about what is involved in buying a property.
Listen to Andrea’s discussion:
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What factors should listeners take into account when choosing a home?
Listeners should remember that “the day you buy is the day you sell”
Before you begin your search make a list of what you are looking for in your property for example dream home or investment property, ready-made property or fixer upper, idyllic countryside or bustling town life. No property is going to be perfect but it is important that it fits your needs and requirements as much as possible.
Visit a number of auctioneers so that you can see what the market has to offer. Take away brochures and information and compare and contrast the properties in your own time. In this technology driven world, scour the internet for properties.
Many factors have to be taken into account when buying a home such as:
- Cost and financing the purchase
- Are all services nearby such as place of work, shops, schools, transport, sports facilities?
- Are there road-widening proposals in the pipeline? You certainly don’t want a busy dual carriageway sprouting up outside your front door with huge juggernauts trundling past day and night.
- Are other developments planned for the locality?
- Has your next door neighbour a long standing ambition to set up a pig farm?
- Check with the local Gardaí on the crime rate. Is it increasing? Drive through the area at night. Is that idyllic laneway at the rear of your house transformed into a den of iniquity once darkness falls?
- Have you plans to extend your family? If so, is the house large enough? Is there scope for an extension?
Should you try and negotiate the price?
- It is very important to make sure that you are getting value for your money. Many buyers will have the upper hand as sellers will be keen to close a deal especially if the property has been on the market for a long time. You may be able to get the seller to include some extra contents in the purchase price when buying or knock some money off the price if there is work to be done.
What costs should listeners be aware of when buying property?
When buying property there are a lot of other hidden costs involved apart from the purchase price of the house, such as:
- Stamp Duty: will apply to all transactions involving the purchase of property; the cost will depend on the value of the house.
- Search Fees: will vary depending on the title and the extent of the enquiries to be made.
- Solicitors Fees: vary from solicitor to solicitor and are quite competitive.
- Surveyors Fees: depend on the amount of work involved, but it is essential for a surveyor to assess the condition of the property
- Registration Fees: are the costs associated with registering the title with either the Registry of Deeds or the Land Registry.
- Insurance: It is essential for insurance to be put in place covering the structure of the property when the purchase is completed. It is the seller’s responsibility to have the property insured up to the date of the closing and then once the deal is completed it is up to the purchaser to insure the property. The lending institution will also insist that mortgage protection insurance is taken out. This ensures that if the borrower dies that the proceeds of the mortgage protection insurance will pay off the remainder of the mortgage.
How important is it for people to have the house or property surveyed by an Engineer?
While the survey is a critical element to a transaction, I think that it is particularly so in a recession.
The principal of Caveat Emptor or buyer beware applies
When an Engineer or other suitably qualified person looks at the property on behalf of a buyer they will be checking for structural problems or faults and will also identify any planning problems.
If the Engineer reports back to the person buying the house that there is a significant amount of expensive work to be done on the house I think that the buyer has to weigh up whether or not this house is a good choice. They will have to consider if the problems can be rectified and at what expense. Following on from that, they need to consider whether or not they can afford deal with the issues identified by the Engineer or indeed if it represents the value for money that they thought that they were getting.
One of the other common issues that arise, when the survey is done, is the discovery of an extension or shed that does not have planning permission. The buyer needs to consider carefully the implications of this finding e.g. can retention permission be obtained, who will make the application, how long will it take and what happens if retention permission is not granted – is this still the house of your dreams!
What is a BER rating?
One of the other innovations of the last number of years was the requirement for BER certificates for properties that are being sold or let. To remind listeners, these are the certificates informing you how energy efficient or otherwise the house is. The house will get a rating of A to G depending on how it performs. You can imagine that the older the property generally the less well they perform. Although most people pay little attention to the BER I think that it is something that people will give more regard to as time goes on. With increasing running and maintenance costs and most likely carbon taxes on the way in the future people will need and want their homes to be more efficient. You might say that a prudent purchaser given the choice between two houses that tick all the boxes in terms of the features that they offer would go for the house with the better rating on the basis that it will cost less in the long term.
Having said all of that we also need to be realistic – very few properties will make a B rating and even less an A rating (the so called passive house) so buyers need to get a house as high up on the scale as they can and then look at what they can do to improve efficiencies and again I think the advice of an Engineer or energy consultant would be invaluable.
What the role of the Solicitor in the purchase process?
Your solicitor will step in and guide you through the formalities. At this stage purchasers are normally eager to sign on the dotted line and get the keys as quickly as possible. Your Solicitor can often seem like the big bad wolf who is slowing everything down. We are acting in your best interests. It is our job to iron out the contract and investigate the title to the property. We have to be sure that the property has a good marketable title so that you will not have any problems selling or mortgaging the property. Always remember the day you buy is the day you sell.
At what point do you have a binding contract?
The purchaser signs the contract first once your solicitor is satisfied that everything is in order. At this point you will also pay the balance of the deposit. The contracts will then be returned to the seller’s solicitor for signing. It is only once the contract has been signed by the seller and one part of it is returned to us that the contract becomes binding. At this point there is no going back! We will then work towards the agreed closing date.
What does the purchaser need to do for the closing?
To avoid any delays with meeting the closing date it is important that you have your finances in order. If you are getting a loan it is now time to ensure that all of conditions imposed by bank have been complied with for example your home insurance and life assurance should be in place.
What happens on the closing date?
Once the closing date arrives, we will again take care of the formalities. We will carry out final searches against the property to ensure that there are no skeletons hidden in the closet. If these are clear we will then exchange the balance purchase monies and the keys will be exchanged and you will become the proud owner of your new property.
Don’t forget to let people know your new address – redirect your post, transfer your utilities, update the address on your television licence, update the register of electors etc
