Buying a Residential Property in Ireland – 2021 Guide

1. Find a Property

It can be difficult to find a property to suit your needs and within your budget in Ireland at present. Once you have established the criteria including price, size and type of property most people will search online for the right property. The sales and marketing of residential properties in Ireland are generally handled by an Estate Agent who is licenced with the Property Services Regulatory Authority (PRSA) to negotiate sales on behalf of Vendors with perspective buyers. The Estate Agent acts for the Vendor and it is the Vendor who is his or her client. Once you select the property and agree a price with the Estate Agent/Vendor you will be asked to give the Agent a ‘booking deposit’. This is an amount of money to secure your bid on a property, however, this amount should be fully refundable until you sign a Contract to buy. The placing of a booking deposit on a property allows the Estate Agent to then write to the Vendor’s Solicitor or Lawyer asking them to issue Contracts and copy of the documents of Title to the property to your Solicitor;

2. Review of Sale Contract and Legal Title to the property (Legal Due Diligence)

The buyers Solicitor main job is to examine the Contract for Sale and documents of Legal Title to the property to ensure that the terms of the Contract are fair and reasonable and that the Vendor has the Legal Title to sell you the property knowns as ‘good and marketable title’. If your Solicitor has questions on the Legal Documents of Title he or she will raise them with the Vendor’s Solicitor. There may also be ancillary Planning and Building Regulation Documentation which your Solicitor will review and if necessary advise you to have reviewed by an Architect or Engineer. With apartments there may be documentation surrounding the Management Company and a certain level of due diligence carried out against it;

3. Property Due Diligence

Purchasing a property in Ireland is on a ‘buyer beware basis’. This means that subject to some limited exceptions (e.g. fraud) once the sale has closed and you have paid the purchase price to the Vendor you have little or no recourse to the Vendor for defects. Therefore, you must carry out certain physical due diligence on the property such as a structural survey to ensure the property is structurally sound, a boundary survey to ensure that the boundaries on the ground match the boundaries of the legal title. In certain circumstances a review of the planning history of the property by an Architect may be required particularly if there have been extensions, alterations, or additions to the property;

4. Bank Loans or Mortgage

You may require assistance of a Bank Loan secured to purchase the property. Generally in Ireland these are in the form of a mortgage or loan to purchase a property which is secured on that property. However, unlike certain other jurisdictions such as the United States the recourse of the Bank for the Loan is both against the property and your other assets. You can apply directly to many of the banks in Ireland for a mortgage or use the assistance of a Mortgage Broker who is independent of any particular Bank and should get quotes from the various Mortgage Lenders. If and when you receive approval in the form of a loan offer the Bank or Lender will issue a pack of documents known as a ‘Mortgage Pack’ to your Solicitor. These documents will be completed in the presence of your Solicitor if and when you sign a Contract to purchase the property;

5. Signing a Contract

Once the Solicitor has received satisfactory replies to his or her queries and you are satisfied with your property due diligence you may then sign the Contract to purchase the property. Once Contracts have been signed by both parties they are binding on both parties (i.e. the Vendor must sell and you must purchase). When signing the Contract you must pay a deposit equivalent to 10% of the purchase price. Remember you will have paid the booking deposit so it will be the difference between that amount and the total of 10%. After this point the deposit and booking deposit are no longer refundable;

6. Completion

The Contracts will specify a closing date which may be dictated on the date on which the Vendors clear the property (known as Vacant Possession) or the date in which you receive your funds from your Bank or Lender. Completion can be anywhere from 2-4 or more weeks from the date you signed the Contract. There is certain legal work to be carried out between the Vendor’s Solicitor and Purchaser’s Solicitor between signing the Contract and completion, such as drafting the documents required for completion. On the point of closing your Solicitor will attend the Vendor’s Solicitors office to review the completion documents such as the document transferring title to you and if all the documents are in order your Solicitor will hand over the balance of the purchase price. At that point you will be the owner of the property;

7. Post Completion

Notwithstanding you have received the key, the purchase price has been paid, legal title passed to you your Solicitor still has some additional work to do such as registering the transfer of Title to you in the appropriate Register in Ireland (known here as the Land Registry). A government tax known as Stamp Duty will have to be paid on the property which is 1% of the purchase price up to €1,000,000.00 and 2% thereafter. If you have purchased with the assistance of a Mortgage, your Title and Mortgage has been registered in the Land Registry your Solicitor will need to send the documents to the Bank to be held as security for your Mortgage.