Guide to buying your house or apartment.
This section deals with the purchase of a house or apartment that is pre-owned, not a new build.
This will be one of the biggest transactions of your life.
The key thing to be aware of is the fact that your purchase wil depend on at least a minimum of one other and maybe several other parties all moving house at the same time with each transaction dependent on the other- this is known as a chain. This means everyone is dependent on others. You need to be organised and ready to jump onto that train.
Now, where to start. The first steps are to budget and plan. We have a seperate section dealing with all the stages of the purchase to allow you plan and stay informed.
The main difference between these is the house is a stand alone ownership. You own your house and do not have to answer to anyone. With a town house or apartment its different;
- You are part of a collection of owners who have shared rules governing the common areas around the property.
- If it is an apartment or multi storey development it may include common stairs, car parking or green areas.
- To fund the maintenance each owner pays a management or service charge annually.
- The services are run by a management committe appointed by all of the owners. In some cases, if the development has lots of units or if there is nobody willing to take responsibility the management committee hire a professional property magagement company.
- Typical annual fees can run from €500.00 to several thousand euro for the high end properties with lifts , flower gardens, and lawns etc. The service charge will include the cost of insuring the common areas.
- You cannot sell your unit unless the service charge is fully paid up.
- deposit ( booking and contract)
- solicitor's costs
- stamp duty and registration fees
- title searches
- surveyors (your surveryor to assess the condition of the house and to forewarn and defects)
- valuer (bank valuer)
- moving company (if you have a lot of belongings)
- balance of purchase price if you are not borrowing 90% of the purchase price
- When you agree to buy a house or apartment the selling agent will require you to pay a booking deposit. This is usually €5,000.00 - €10,000.00 depending on the price. This booking deposit is fully refundable if the transaction does not proceed for any reason whatsoever. The agent willl send you a sales advice sheet within days of you paying the booking deposit. This is the first step in the whole purchase transaction. The Agent will only take your booking deposit when the seller accepts your bid. The sales advice sheet will list the main terms of the sale with details of the price, estimated closing date, name of all parties and their Solicitors details. However, the house is not definately yours at this stage (see section on exchange of contracts below).
- You will be asked to pay a further sum on signing the contract. Usually the amount will be 10% of the purchase price less the booking deposit already paid by you. You should have selected your Solicitor eartly in the process. When engaging your Solicitor you should get a full quote which should include Stamp Duty, PRA registration fees, law searchers and miscellaneous outlay.
Stamp duty and registration fees;
- The buyer pays the stamp duty-always. Residental property is subject to Stamp Duty of 1% of the purchase price ( up to €1 million and 2% above). You must register your purchase deed and the mortgage with the Property Registration Authority (PRA). Fees vary depending on the price of the house starting at €600.00 for the purchase deed and a fixed fee of €175.00 for the mortgage. If the house you are buying has never been registered in the Property Registration Authority your application will be a "first application" which will take much longer and sometimes well over a year if the title is complex.
- Your Solicitor will order title searches on the closing date. These searches are against the title and all the parties to the transaction- including you. This is a requirement of your loan approval. Planning searches may also be required. The search costs will vary depending on the title but allow up to €150.00 but on rare occassions may run higher especially if there are planning searches.
- A property survey is not necessary in every purchase but is very important for an old house or a house in a rural area. There may be issues with boundaries or road widening, septic tank, water supply etc. It is also essential if you do not have any experience of building or construcition. A survey may save you from buying a property with hidden defects. A survey can cost in the region of €450.00 but may be money very well spent.
- This valuation report is required by the bank to ensure that they are not lending to fund a purchase at an inflated price. The bank has maximum loan to value levels. The valuation is to ensure they do not exceed those levels. These valuations will cost up to €200.00.
- This is not essential but will depend on the amount of belongings you intend moving. The cost will depend on the volume, the distance of the move and flexibility of the move. There is no set fee so shop around.
Balance of the purchase price;
- Assuming you have paid a total of 10% of the purchase price between Booking and Contract deposit you will still have to pay the difference between the loan cheque and the purchase price. This amount will be paid by you to your solicitor ahead of the closing date.
- Your budget determines what and where you may buy, this sets the limits on your options. Sometimes when prices are going up its is important to move as soon as everything is set. Sometimes the property market prices run up very quick and overshoot. You need to watch out for this. If this happens the prices may come back down to realistic figures. With a short supply of houses in an area a large number of buyers chasing er of houses available may push everything out of sync. You should only trust agents who are experience and trustworthy.