Purchasing a property with cash?

TeaBagMania

Never purchased a property in Ireland before and have a few questions for the seasoned professionals.

Do I need an RA to represent me or will a solicitor be sufficient?

Once a price is agreed upon how long does it take the solicitor to run title checks, etc, and have the paperwork ready to sign?

Example: If I have a solicitor in Co. Galway can they close on a property purchased in Co. Kerry? Or should the solicitor reside in the same county as the property?

One area im particularly concerned about is having the seller back out after I have already started the paperwork wit the solicitor, or have invested $$$ into this purchase?

riclad

Say your bid is accepted today, it takes 2 months approx for the sale to go complete. you'll sign the contract about a week or 2 before the sale is complete. if you are buying off the owner, it may be a bit faster. ie there's no loan on the house, there's no bank involved. You just need a soliticor. you get your deposit back if the seller backs out. The solicitor doesn't have to reside in the same county, doesn't make much difference. if i was buying in dublin i'd get a solicitor from dublin anyway. check the property price register for the area, and www.daft.ie to make sure you are not paying too much. Don't pay for a house survey unless your bid is accepted. is ra real estage agent ?

TeaBagMania

riclad wrote: »

you get your deposit back if the seller backs out.

Ric, thanks for the reply

This is my issue. If I have already paid my solicitor to start the paperwork and go thru title checks, etc. the seller can back out of the deal. Am im out the money I paid to my solicitor?

Shouldn’t the contract be signed day one and not six weeks into the sale? That means the seller has six weeks to accept a higher offer on the house and leave me high and dry with solicitor fees?

Also, what’s the typical deposit required?

edit: sorry about font, dont know why it does that

Bacchus

TeaBagMania wrote: »

Ric, thanks for the reply

This is my issue. If I have already paid my solicitor to start the paperwork and go thru title checks, etc. the seller can back out of the deal. Am im out the money I paid to my solicitor?

Shouldn’t the contract be signed day one and not six weeks into the sale? That means the seller has six weeks to accept a higher offer on the house and leave me high and dry with solicitor fees?

Also, what’s the typical deposit required?

Hey, only speaking from the experience I'm currently going through (not a cash buyer though)... I thought the solicitor was only paid once the sale goes through and they complete the work. Our solicitor is currently processing our paperwork and the fee isn't due until the end.

It's normal enough that this period of time exists where the seller (or buyer) can back out. It sucks that all you have for this 4-8 week period is essentially a "gentleman's agreement". I've heard plenty of stories of people getting gazumped while waiting for the deal the complete. We're holding our breath ourselves until we sign the dotted line.

We paid a holding deposit to the EA of 2.5%. Not sure what the standard practice is but that's what we paid.

TeaBagMania

Ah, ok thanks Bacchus for the clarification. So that means the solicitor has skin in the game as well and can be out time and money if the seller decides to back out.

Totally different procedure than buying a property in the states. We sign a contract day one on an agreed amount and the seller can’t back out of the deal without serious legal consequences

Mrs OBumble

TeaBagMania wrote: »

So that means the solicitor has skin in the game as well and can be out time and money if the seller decides to back out.

I think it depends on the contract you have with your solicitor.

I would not trust any who work on a no-sale-no-fee basis, because that would be a disincentive to the to tell you about any legal problems that were uncovered during the process.

Yes, property purchasing here and in the UK is different to many countries.

riclad

The solicitor has to check out all the files, on the house, is there a loan on it, is there any issue re boundaries, ie sometimes the boundaries don't match up with the ones on the folio map. Are all the documents available, is there a complete set of deeds, this takes a few weeks, So its not possible to sign a contract, on day one. if the sale does not complete, you may end up paying zero to anyone. Our legal system is based on the UK system to a large extent. at least when it comes to buying a house.

if you are buying a house in Kerry get a solicitor in the area, unless you have a specific reason to use one from Dublin. 95 per cent of the time sellers do not back out, so it's not worth worrying about. on Older houses, 30 plus years old, it may be prudent to pay for a full survey, cost 4-500 euros, if your bid is accepted, to check for structural problems, dry rot, leaks etc. if you buy a house in rural areas the chances of the seller backing out is close to zero.

TeaBagMania

Ric, thanks again. I think the contract im referring to might be a bit different and maybe only applicable in the states. It gives the solicitor and buyer a predetermined amount of time to run background checks and full surveys on the property without worry of the seller backing out after the buyer has already made a monetary investment into the property.

If any issues are found the buyer can renegotiate with the seller or walk away with deposit if still within the predetermined amount of time, here typically 30 days.

I guess Ireland is just a totally different world when it comes to purchasing property, and as Bacchus mentioned ill have to put my faith in the “gentleman’s agreement”

riclad

IT would not work in Ireland, re signing a contract ton day 1. seller x may sign a contract on day one, to sell the house, then the bank blocks the sale, or your solicitor discovers certain vital documents are missing, or a survey discovers there a major problem, with the house, with entails costly repair work. eg 20k plus cost. The present system works fine in most cases, eg 98 per cent of sales go through, without a problem after the bid is accepted and you pay a deposit to show you are a serious buyer. IT,S probably as good as the USA system in terms of sales being completed. I presume the solicitors have a professional code of practise, ie not to charge clients in the case where a sale does not go thru.

sometimes buyers do not sign the contract, if they find there's major repairs to be made, and the seller will not agree to reduce the agreed price to account for the extra expense,s involved, in carrying out the repairs.

SarahMollie

riclad wrote: »

The present system works fine in most cases,
eg 98 per cent of sales go through ,without a problem
after the bid is accepted and you pay a deposit to show you are a serious buyer .
IT,S probably as good as the usa system in terms of sales being completed .
I presume the solicitors have a professional code of practise ,ie
not to charge clients in the case where a sale doe,s not go thru .

sometimes buyer ,s do not sign the contract, if they find there,s major repairs to be made ,
and the seller will not agree to reduce the agreed price to account for the extra expense,s involved ,
in carrying out the repairs .

Can you tell me where you got the figure of 98% of sales going through? This is not remotely the case. I personally had 3 sale agreed's fall through and only bought on my 4th attempt.

Each time i owed my solicitor some money as he had engaged with the vendors solicitors in each case and reviewed contracts. You cant expect solicitors to forfeit their fees for work done if the sale falls through for reasons outside of their control.

My advice is to ask for a breakdown of costs from your solicitor and enquirer about what you're liable for in the event of the sale falling through at various points in the process.

Property law in Ireland is completely different to that in the US, so basically don't assume anything.

riclad

I,M not a legal expert ,
in my experience most sales go through .
Especially in rural area,s where theres not so many bidders on a house for sale .
i know 5 people bought house,s , or apartments in the last 8 year s,
no delays or sales falling through.
2 persons each i know bought 2 houses, 150k plus for each house.
eg 2buyers ,4 houses bought .

c_meth

Sales frequently fall through.

To answer the original question, yes you can spend money on a solicitor, a survey, a deposit (which really means nothing), a valuation and still not purchase the property because the seller has changed their mind. You will get your deposit back but all other expenses will have to be paid. Your solicitor bill mightn't be as big as if you'd completed the sale but you can be sure they'll charge you for the work they've already done.

There is nothing binding until contracts are signed. It's not a great system.

athtrasna

Cash buyer sales can go through extremely fast if no bank involved on either side. My housemate went from offer to keys in three weeks. He was a cash buyer and the property he bought was inherited and rented so no banks involved.

riclad

I THINK its better to go into the sale thinking things will go through ,
the sale will complete.
Be wary if the house for sale is negative equity,
the loan is bigger than the house price .
Can the seller pay the difference .
ask your lawyer to check out the situation .
will there be any delays from the bank ,holding up the transaction .

the_syco

TeaBagMania wrote: »

Shouldn’t the contract be signed day one and not six weeks into the sale? That means the seller has six weeks to accept a higher offer on the house and leave me high and dry with solicitor fees?

Your solicitor will be checking the deeds out, and you'll need to get a surveyor in to ensure that there isn't anything costly that is going wrong with it.

For example, if it's a recent build, the house could have a high percent of pyrite in it, or if not near a town, it's septic tank could need a lot of work, etc.

MarkAnthony

The solicitor will charge for each sale that falls through. How much they charge will be dependant on how much work they've done which varies from transaction to transaction.

SarahMollie

riclad wrote: »

I,M not a legal expert ,
in my experience most sales go through .
Especially in rural area,s where theres not so many bidders on a house for sale .
i know 5 people bought house,s , or apartments in the last 8 year s,
no delays or sales falling through.
2 persons each i know bought 2 houses, 150k plus for each house.
eg 2buyers ,4 houses bought .

Hardly statistically significant.

Facts are the a considerable proportion of sales don't make it past sale agreed, which in itself guarantees the prospective buyer nothing.
You're not on firm ground until contracts are signed. There is significant risk for the buyer that costs such as legal fees, valuations, surveys, etc can be wasted if the vendor changes their minds or is prevented from selling by their bank or whatever other reason.

The only positive is that it also protects you if you want to pull out for whatever reason. Either party can pull out until contracts are signed without giving a reason and the deposit must be returned.

riclad

In a case where someone owns a house , there,s no loan on it,
there,s less chance of the sale no being completed .
Also in a case where the family home is being sold ,the house is empty theres less chance of the sale not being completed.
As long as the family agree on the sale price, value of the house .

johndaman66

SarahMollie wrote: »

Facts are the a considerable proportion of sales don't make it past sale agreed, which in itself guarantees the prospective buyer nothing.
You're not on firm ground until contracts are signed. There is significant risk for the buyer that costs such as legal fees, valuations, surveys, etc can be wasted if the vendor changes their minds or is prevented from selling by their bank or whatever other reason.

I have no figures to hand but from my own experience and that of friends, family etc. I'd also be highly doubtful if anywhere near 98% of sales are completed following on from the sale agreed. I'd agree SarahMollie that its most likely to be the case that a significant portion dont make it to this point.


Just to mention I being a buyer went sale agreed at one point just over two years ago. Just a couple of days before I was expecting to close the sale I got a call from the Estate Agent to say a considerably higher bid was in and I'd have to exceed it to proceed from my point of view. It was a game changer for me. Was expecting a significant bill from the solicitor but when I met him he said there was no charge. Hadn't used him ever before to do a any work for me so it wasn't like I was a valued customer in that sense. Then again he wasn't established that long and he knowing that the likelyhood was that I'd be buying in the near future he asked that I would avail of his services if and when I do go sale agreed again...pretty sound. Point being not all solicitors will necessairly charge for services provided if the sale does fall through..

Victor

TeaBagMania wrote: »

Ah, ok thanks Bacchus for the clarification. So that means the solicitor has skin in the game as well and can be out time and money if the seller decides to back out.

No. Each party is responsible for their own legal and other costs. If one or both side backs out, both solicitors are still entitled to be paid - unless the solicitor has agreed to something particularly stupid. Using a local solicitor may be useful, as it may speed things up modestly and they may have local knowledge, e.g. that the titles on certain neighbouring properties are defective and this may impact on your property or that the site is liable to flooding..

I would suggest that you do engage someone to do a survey. A building surveyor www.scsi.ie would probably be the best person to use. Given that you aren't local, get them to sit down and explain their report to you. Important issues are structural stability (generally and pyrite in particular on modern properties), damp (it rains a lot in Kerry), insulation, plumbing / electrical and drainage. If you wish, ask them to put a price on rectifying potential issues.

Unless it is a brand new property, expect to have to spend some money. With a new property, check the specification to see what is included, e.g. some might not include carpets and painting.

Here is a list of typical bills that people have to pay: http://www.boards.ie/vbulletin/showthread.php?t=2056630516 Note that your property is likely to now be liable for Local Property Tax and that Irish Water has taken over responsibility from councils for water supply and drainage.

Tigger

johndaman66 wrote: »

I have no figures to hand but from my own experience and that of friends, family etc. I'd also be highly doubtful if anywhere near 98% of sales are completed following on from the sale agreed. I'd agree SarahMollie that its most likely to be the case that a significant portion dont make it to this point.


Just to mention I being a buyer went sale agreed at one point just over two years ago. Just a couple of days before I was expecting to close the sale I got a call from the Estate Agent to say a considerably higher bid was in and I'd have to exceed it to proceed from my point of view. It was a game changer for me. Was expecting a significant bill from the solicitor but when I met him he said there was no charge. Hadn't used him ever before to do a any work for me so it wasn't like I was a valued customer in that sense. Then again he wasn't established that long and he knowing that the likelyhood was that I'd be buying in the near future he asked that I would avail of his services if and when I do go sale agreed again...pretty sound. Point being not all solicitors will necessairly charge for services provided if the sale does fall through..

Very decent of him but I'd doubt it's the norm