The process of buying a home in Ireland can be lengthy and there are many costs involved, for example, mortgage costs, legal fees, registration of deeds and stamp duty. You should only consider buying a property in Ireland once you can afford it and if you plan on staying for a reasonable length of time. Otherwise it may not be a sound financial move and you could risk losing money.
- Decide How Much You Can Afford to Spend
- House Hunting
- Buying Your Home
- Finalising the Purchase of the Property
- Once the Sale Has Completed
Decide How Much You Can Afford to Spend
Make sure that you include not only the cost of the house, but also the other additional costs such as solicitor fees and stamp duty.
Meet with banks and mortgage brokers to get a mortgage approval in principal to help you establish how much you can afford to spend.
There are many different types of mortgages, so contact a number of different mortgage providers to find out who can offer you the best deal. Otherwise, consider using a mortgage broker.
- In Ireland, you need to do the bulk of the house hunting yourself. Real Estate Agents will show you properties that they have listed, but not what other agents have listed.
- Once you’ve decided on your ideal location, the best place to start searching is in local papers and online. Try property websites such as Daft.ie, Rent.ie, Property.ie, Myhome.ie, and Gumtree.ie. Create search alerts so that properties in your search criteria are emailed to you as soon as they are listed. You should also make contact with the local Real Estate Agents operating in your preferred areas and register with them. Hopefully they will contact you when they have something suitable for viewing, but you can’t rely on this, so continue your own search.
- When carrying out house viewings, have a property checklist with you to help guide you in your decision making process. In addition, look at the homes Building Energy Rating (BER). The BER will provide you information about how energy-efficient the home is. You can use this information to help you compare properties and provide you guidance on steps that can be taken to improve the energy efficiency of the property. Make sure that you consider these costs on your total budget if you decide to choose a home that needs improvements.
- You should also check whether the home is in a High Radon Area. You can do this on the Environmental Protection Agency (EPA) Radon Risk Map and also inquire as to whether the home has been tested for radon.
- If the home was bought since 1 January, 2010, the price that was paid for it will be published on the Property Services Regulatory Authority’s Residential Property Price Register. This may be of interest to you and is worth checking.
Buying Your Home
- Any offer that you make on the property should be contingent on a property survey. In Ireland, the seller is under no obligation to disclose defects in a property, so you should get a survey of the property to find out if there are any defects before finalising the purchase. The Society of Chartered Surveyors Ireland (SCSI) is the professional body for chartered surveyors.
- Go back to your lender to obtain a formal mortgage approval before you sign a contract for sale. Otherwise if you can’t secure a mortgage for the property, you will lose your deposit and may face other penalties.
- The two most common methods to buy and sell properties in Ireland are by private treaty sales and public auctions.
Private Treaty Sale
You can contact the seller or the seller’s agent (usually an estate agent), to agree a purchase price. When there is an estate agent involved, you may be required to pay them a booking deposit once you have agreed to buy the property. Once you have paid the booking deposit, the legal process to buy the property may begin.
Obtain a formal mortgage approval from your mortgage provider. You will need to have mortgage protection insurance and home insurance. You can organise these with your mortgage provider but it is advisable to shop around.
Once your solicitor has checked the contract for sale, you will sign it and forward it to the sellers solicitors. At this point you have legally agreed to purchase the property. Once you have signed the contract you will need to pay a deposit (less any booking deposit), which is usually up to 10% of the purchase price. Be aware that the seller has only legally agreed to sell you their property once they have signed the contract.
- The booking deposit is refundable up to the signing of the contract for sale.
- Until the seller has signed the contract, they can still change their mind. This typically happens if they have been offered a higher price by another buyer.
A reserve figure is set for the property, usually by the seller or the auctioneer. The reserve figure is the value that the property must achieve. Anything below this and the property will be withdrawn from the market. But here’s the catch – at all times during the auction the vendor (seller) can still withdraw the property from the market, even if it achieves the designated reserve amount. The vendor also has the right to sell the property before the auction.
There will be a designated date and time for the auction to take place. If you plan to bid on the property, then prior to the auction your solicitor should check the contract for sale for the property (issued by the seller’s solicitor) and all title documents that are referred to in that contract. Once your solicitor has completed this, you can organise a survey of the property to ensure it is sound. You should also obtain a formal mortgage approval for the property.
If you are successful in bidding for the property, you will need to pay a deposit and sign the contract for sale. It is important to get home insurance as soon as possible.
Finalising the Purchase of the Property
To finalise the purchase of the property, you will need to sign the contract for sale. The contract for sale binds the parties to the completion of the sale. If you withdraw from the sale after this contract has been signed, you may lose your deposit.
- If you purchase your property at auction you must immediately sign the contract for sale.
- If you buy the property through private treaty your solicitor will check that the contract is in order before you sign it.
After signing the contract and before the completion date of the sale, your solicitor will carry out Requisitions on Title. This is where the solicitor raises general queries about the property with the seller’s solicitor, such as, whether fixtures and fittings are included in the sale. Once these are finalised, a Deed of Conveyance is drafted by your solicitor and approved by the seller’s solicitor.
Your solicitor will also carryout checks to ensure there are no judgements lying against the seller, e.g. bankruptcy and to ensure that there is nothing adverse attaching to the property, e.g. an outstanding mortgage.
Once the Deed of Conveyance is approved by the seller’s solicitor, your solicitor will contact your mortgage provider to request the Loan Cheque – the remaining balance of the purchase price. It is paid to the seller’s solicitor and all documentation, and keys to the premises are handed over to your solicitor.
You will be required to pay a stamp duty tax on your new home. This is 1% of the total value of your new home up until €1 million, and 2% on any value above €2 million. Your solicitor will request this from you before the closing of the sale. The stamp duty is paid to the Revenue Commissioners, who place a stamp on the deeds (which name the owner of the property). Without this payment, the deeds cannot be registered.
Once the Sale Has Completed
Once the sale of the home has been completed, your deeds, showing the new ownership details and mortgage details (if applicable), must be registered with The Property Registration Authority (PRA).
The final step is then moving in to your new home! Use this moving checklist to help you prepare for the move.
Keen to learn more about buying property in Ireland? Then try these books: