What Happens When You Go Sale Agreed on a Property?
By Helen O’Keeffe
Being in the market for a house or apartment requires a bit of time and effort – you have to focus on saving especially if you’re planning on purchasing with a mortgage plus attending viewings for prospective properties is time consuming. So what if your hard work has paid off and you’re now sale agreed on a property – what happens next?
Once you’ve paid your booking deposit (which tends to range anything from 2-4% of the overall price, although it varies from auctioneer to auctioneer), the estate agent will confirm once they’re in receipt of it. This triggers them to issue what’s called a sales advice notice. This is sent to both your solicitor and the seller’s solicitor. The sales advice notice contains the following details:
- The property address
- The agreed purchase price
- Whether contents are included; if they are, they will be itemised
- Seller’s name & solicitor name with contact details
- Purchaser’s name & solicitor name with contact details
- Estate agent’s name & contact info’
- Booking deposit amount
- Estate agent’s selling fee
Once the seller’s solicitor confirms the receipt of the sales advice notice, then the property can be marked as sale agreed by the estate agent and it advances into the conveyancing part of the sale. Conveyancing is the term used for the period of the sale between sale agreed to the stage when the sale closes and you get the keys of the property. Conveyancing is handled by solicitors and unfortunately can take some time depending on issues that might arise. Conveyances can take anything from 4 weeks (optimistic) onwards. You should put some research into getting a solicitor while you’re searching for a property; read their reviews and ensure that they’re experienced in conveyancing. An efficient and experienced solicitor can make a massive difference in terms of the time scale involved in the closing of the sale so it’s important to choose carefully.
Even after you’ve agreed on a property, you can still withdraw your offer unless it’s an auction sale. With private treaty sales (most property transactions in Ireland are private treaty), a seller or buyer alike can withdraw their offer / withdraw the sale up until contracts are signed.
So now that you’ve hit sale agreed, it’s important to know that you will encounter some further associated costs such as:
- Stamp Duty
This is 1% of the purchase price up to €1 million and 2% for a property worth more than €1 million. For new home purchases, the stamp duty is only applied to the price of the property minus VAT, (13.5% as of April 2022).
- Legal Fees / Conveyancing Solicitor
Property buyers should budget for at least €1500 for this segment of the purchase. But it will likely be more as it will include outlays associated with the solicitors work e.g. searches, land registry fees and so on so those “outlays” are they’re called vary but it would likely be another €1000 on top of the professional legal fee.
Your mortgage lender )if you’re using a mortgage for the purchase) will have a panel of valuers that they deal with for this part of the purchase. This costs approximately €150.
- Property Survey
Typically you should budget at least €500+VAT for a property inspection. This is usually closer to €1000 though as the surveyor might need to confirm boundaries for your solicitor.
You’ll need to have organised home insurance as well as mortgage protection (or life insurance) for your mortgage provider before they will release funds. Shop around for the best prices for these as they tend to vary greatly.
As the conveyance progresses, your solicitor will receive contract drafts from the seller’s solicitor. Your solicitor will review them and raise any related pre-contract queries. Once all of that is resolved, your solicitor will inform you that you need to sign the contracts. At this point also, you will discuss a possible closing date in the future that can be agreed upon with the other side. All communication goes through the solicitors so lean on your solicitor for updates as time passes on.
Sometimes as part of their advice, a solicitor might tell you to organise a final inspection (also known as a walkthrough) of the property you’re sale agreed on. This is generally done very close to the end of the process as indicated by the words: final inspection. This is simply another walk through of your property to ensure certain things have been done and that the property is as you expected it to be. For example, one of the stipulations from your solicitor might be that the attic has been cleared of all items and a final inspection will confirm that aspect for you. Once everything is sorted, you arrange the collection of keys; this can only happen once the seller’s solicitor has confirmed the closing of the sale to the seller’s appointed estate agent.