Steps in a House Purchase
1. The Purchaser agrees to purchase the house
The Purchaser agrees the price with the auctioneer and pays a booking deposit which is usually refundable in the event of the purchaser deciding not to proceed with the transaction prior to signing contracts for sale. The Purchaser gives his/her Solicitor's details to the Auctioneer. The Auctioneer sends a copy of the sales advice note to the Solicitors for both sides, setting out the terms that have been agreed i.e. price, deposit, closing date, list of contents included in purchase price etc.
All documents are marked Subject to Contract/Contract Denied. This makes it clear that there are no binding contracts yet, usually until contracts have been executed as well as exchanged by both purchaser and vendor in addition to a full deposit having been paid.
2. The Vendor's solicitor issues contracts for sale to the Purchaser's solicitor
The Purchaser's Solicitor reads the Contract and Title Documents.
Pre-contract enquiries may be raised, particularly if the property is a second hand apartment or house in a housing estate which involves a management company.
3. The Purchaser's Solicitor arranges for the Purchaser to sign contracts
If the title is in order and conditions of the sale have been agreed between purchaser and vendor, the Contracts for Sale are signed by the purchaser in the presence of their solicitor. The Purchaser must provide the necessary funds for the balance deposit monies due. The Purchaser signs mortgage documentation.
4. The Purchaser's Solicitor returns contracts
The Purchaser's Solicitor returns contracts, along with a cheque or bank draft for the balance deposit monies due. At this stage, most Purchasers' Solicitors also send a standard set of questions about the title of the property (called Requisitions on Title) to the Vendor's Solicitor.
They also send a Draft Purchase Deed for approval by the Vendor's solicitor, provided the property is not a new house/apartment in a development. In this instance, the purchase deed is drafted by the vendor's solicitor.
5. The Vendor signs the contract
The Vendor signs the contracts for sale, usually at his/her solicitor's office. The vendor's solicitor returns one part of the contract to the purchaser's solicitor. Only now is it a Binding Contract provided that contracts were issued on the basis that binding contracts would not be in place until contracts were exchanged and signed by both parties as well as a deposit having been paid in full.
6. The Purchaser's Solicitor requests their client's loan cheque
If the purchaser is borrowing money to buy the house, his/her solicitor will normally request the Loan Cheque or funds by EFT about two weeks before the closing date for the sale. It takes about one week for a cheque/funds to issue provided all formalities are in order, and it can take up to 5 days or a further week to clear the solicitor's client account.
7. Closing the sale
Closing the sale is where the purchaser acquires title/ownership of the property and as a result becomes the owner of the property. It is essentially a swapping exercise; money is swapped for documents and keys. While traditionally sales were closed in the offices of the Vendor's Solicitors, nowadays most closings take place by post.
Once the Vendor's Solicitor has received the Balance Purchase Monies, and the purchaser's solicitor is happy that the documents are in order and searches received are clear/certified by vendor's solicitor, the sale is completed.
8. The Purchaser's Solicitor attends to stamping and registration
For stamp duty purposes, the Purchaser's Solicitor must lodge the Transfer Deed for stamping with the Revenue Commissioners within 30 days of closing. Even if there is no stamp duty payable, the deed must be submitted to the Revenue Commissioners for PD (particulars delivered) stamping in order to avoid penalties and interest.
Once the Transfer Deed is returned, the deed is submitted for registration in either the Property Registration Authority or the Registry of Deeds.
Once the registration of the transfer deed is completed, the Purchaser is the registered owner. Even if there are delays in completing registration, the purchaser can now sell the property if he/she so wishes.
9. The Purchaser's Solicitor completes the registration and sends title documents to the purchaser's lending institution.
Once the registration is completed, the Purchaser's Solicitor sends the Title Deeds to the lending institution which provided the mortgage for the house purchase.
If the property is mortgage free, the deeds are available for collection at the solicitor's office or the solicitor can retain them in their fireproof cabinet for safe keeping.
The transaction is now completed.
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