The prospect of buying a house, whether you are a first-time buyer, trading up or downsizing can be both exciting and daunting. We have outlined the process below, with the aim of providing a simplified guide to the process. It must be noted however, that each transaction will have its own nuances and peculiarities to be addressed.
The process below involves the purchase with a mortgage, via private treaty (i.e. offers made through an auctioneer and not a purchase at an auction).
1. Identify and secure the right property at the right price.
2. Pay booking deposit to the auctioneer. This is a holding deposit only and a gesture of good faith. It should mean the property will not be actively marketed pending your opportunity to carry out due diligence in respect of the legals, survey etc. The agreement will not be binding until such time as a contract is signed by you and the vendor.
3. Instruct a solicitor to act on your behalf and ensure it is someone you can have confidence in and relate to. Cheapest isn’t always the best! Your solicitor should provide a budget for the purchase to include fees, costs and outlays (e.g., stamp duty, land registry fees) which you will incur in respect of proceeding to purchase this property.
4. Organise a survey of the property to be carried out by a suitably qualified engineer with appropriate professional indemnity insurance. The engineer should also be asked to check the boundaries and, in particular, that the boundaries on the ground are accurately reflected in the title map. The engineer should also be asked to carry out a planning search and advise you of any relevant matters prior to committing to contract.
5. Secure a formal loan sanction and be aware of the terms of which the bank will lend you the funds to complete your purchase. Usual conditions include life cover, fire cover/ home insurance valuation, etc
6. Your solicitor will carry out due diligence once in receipt of contract from the vendor’s solicitor. The due diligence will include the following and a report is to be provided to you as the purchaser; (a) investigate title and whether leasehold or freehold and consequences of same; (b) advise on planning in conjunction with the surveyor’s report; (c) investigate position regarding access and services (i.e. water/sewer) at property including any wayleaves affecting; (d) review the position in relation to property taxes to include local property tax (LPT) and non-principal private residence (NPPR) charges; (e) review the special conditions in the contract for sale and advise the purchaser in respect thereof.
7. Once you are satisfied with all of the above, only then will you be in a position to commit to the contract. This process usually takes around 4 weeks from the payment of the booking deposit. On signing the contract, a 10% deposit is payable less any booking deposit already paid. The vendor then countersigns the contract at which point it becomes binding and completion date is agreed which is usually 2 – 3 weeks thereafter.
8. Your solicitor attends to the drawdown of loan funds and provides a statement of account for you to provide the balance, including stamp duties, land registry fees and costs.
9. On completion, your solicitor pays over the balance of funds in return for the title deeds and the keys. You should attend to transferring of utilities, e.g. organising your electricity/gas etc.
10. Your solicitor will attend to stamping and registration of title and mortgage. Once the registration process is completed, the deeds will be returned to the bank who will hold the deeds during the term of the loan.
While the above is a simplified guide, we hope that it outlines the process to allay some concerns or queries. At each stage, difficulties may arise that require an experienced legal team. At J.W. O’Donovan, we have an extensive property practice and act for a range of clients in the sector – to include: developers, banks, commercial landlords, and private clients. It is this wide range of practice within the property sector that allows us to tailor our advices to suit the particular needs of each and every client.
For more, please contact a member of our property team by email to firstname.lastname@example.org or via telephone on 021-7300200.