CONSIDERING BUYING A RESIDENTIAL PROPERTY? TIPS TO PREPARE YOU FOR THE PROCESS

BUYING A RESIDENTIAL PROPERTY
  1. Budget for All “Hidden Costs”

Many prospective purchasers know that they need to save for a deposit, secure a mortgage if needed, and pay legal fees but they are not aware of other costs associated with buying a house.  Ensuring that you have enough funds to pay for the following “hidden costs” will help make buying your new home that much easier:-

  • A Valuation Report (if mortgage needed)
  • Mortgage Protection Policy (if mortgage needed)
  • A structural survey
  • Home Insurance
  • Commissioner for oaths fees (generally between €30/€40)
  • Property tax (varies hugely depending on value of property)
  • Property Registration Authority fees (usually between €3000 and €700)
  • Removal fees
  • Stamp Duty (1% of the value of property up to €1m
  • Service Charges (vary hugely depending on property)
  • ESB, Bord Gais and UPC connection fees
  1. Have a “Loan in Principle”

Before you place offers on properties, secure a “loan in principle” from one or more lending institutions.

A “loan in principle” (an LIP”) (also called “mortgage in principle” or “agreement in principle”) is an agreement to lend based on an initial assessment of your circumstances, which includes your  income, outgoings and your credit score among other things.  Being offered a “loan in principle” forms part of the initial consultation phase of the mortgage application process.  Once your offer has been accepted, you could then complete the mortgage application process and a letter of offer could issue to you faster than had you not instigated the process at the outset.

Not only will you know the price range of properties you should be viewing but having an LIP could in theory make you a more attractive buyer and stand you apart from other prospective buyers during the bidding process.

Good to Know

At present in Ireland banks are restricted from lending more than 90% of the value of the property.

  1. Plan Your Negotiations

Once you have found your perfect property, you need to decide how to bid for it.

Firstly, before placing a bid, make sure that if contents are to be included in the sale, a list is agreed and that the vendor acknowledges that any offer you make is subject to a satisfactory structural survey having been carried out.

Some general tips for bidding and negotiating are:-

  • When first meeting the estate agent/seller, downplay the amount of money you have to spend as s/he will inevitably show you properties which are outside your initial quoted price range.
  • If you fall head over heels for a property, downplay your interest. Draw the attention of the estate agent to work that needs to be done and the estimated cost of same (obtain a quote from a contractor if necessary).
  • Maintain close surveillance of the property market and, in particular, be aware of how much properties in the area are selling for and how quickly. If they are moving very slowly and selling for below the asking price, you are in a better position to make a low offer.
  1. Beware of the “Buyer Beware” Principle

The “buyer beware” or “caveat emptor” principle operates to place the burden on a buyer to ensures that there are no defects in the property which would have been disclosed had a reasonable inspection been carried out and that the property meets his/her expectations.  It is for this reason that buyers must do the following before making an unconditional offer and/or signing a contract to buy any property:

  • Obtain, review and consider a structural survey of the property and ensure you are happy with same.
  • Ensure that the map of the property (which will be provided to you by your solicitor) corresponds with the boundaries as they appear “on the ground”.
  • Research the area surrounding the property and ascertain from the local planning authority whether or not there are plans to carry out large development, including road construction which might affect your enjoyment of the property.
  1. Choose your Solicitor wisely!

Once your offer has been accepted, the vendor’s solicitor will prepare draft contracts based on the heads of terms that have been agreed and will send them to your solicitor.

Your solicitor will raise queries and ensure that the vendor has proved or will be in a position to prove that “good marketable title” to the particular property is capable of being shown on the proposed date of completion.

The conveyancing process can seem complicated as it involves a number of steps.  It is therefore important that you choose a solicitor with whom you communicate well and who is easily approachable.

Solicitors’ fees vary greatly and the format of their estimated bill of costs and outlay do too.  For example, some may not include the cost of stamp duty or property registration fees in their initial quote whilst others (including Amorys) do – so make sure you are comparing “like with like” before making your decision.

 

Amorys Solicitors is a boutique private client and commercial law firm with more than 30 years’ experience acting for clients in residential conveyancing matters.  To request a quote, please contact Wendy O’Brien of Amorys Solicitors, Suite 10, The Mall, Beacon Court, Sandyford, Dublin 18.  Tel 01 213 59 40, or your usual contact.