Property Conveyancing – What You Need to Know!
What is Conveyancing?
Conveyancing is the process that legally transfers the title and ownership rights of a property from the existing owner to the new owner of the property. Conveyancing gives legal effect to the deal agreed between the buyer and the seller typically by an auctioneer. When a property for sale by private treaty goes “sale agreed”, this has no legal implications as either party can change their mind without penalty at any point prior to signing the contract. The conveyancing process is what makes the transaction binding. In auction sales, the conveyancing is done up front so to speak with the contract and all associated documentation made available to the bidders ahead of the auction – their bids are in turn binding and the contract must be signed by the buyer and seller as soon as the bidding closes.
What Does Conveyancing Entail?
The process of conveyancing revolves around the drafting and signing of the contract for sale. The vendor’s solicitor drafts the contract and sends to the buyer’s solicitor with accompanying documentation e.g. the BER Certificate and Advisory Report. The buyer’s solicitor in turn scrutinises the contract and accompanying documentation to ensure that all is in order and that (s)he is happy for his/her client to sign the contract. This involves checking for any issue which may affect the type of ownership that the buyer is seeking such as planning issues, compulsory purchase orders, rights of way, mapping issues etc.
How Long Does Conveyancing Typically Take?
At Auctioneera, we have seen conveyances take from as little as two weeks to over a year to complete and everything in between. It totally depends on the individual circumstances of the case, the efficiency and professionalism of the solicitors on both sides and how smoothly the process goes. As a general rule, six to eight weeks is a typical timeframe to have in mind. One thing that we always recommend is for our vendors to engage a solicitor in parallel to an estate agent i.e. not to wait until sale-agreed in order to source a solicitor. The reason for this is that if a solicitor is brought onboard while the property is being marketed and viewings are proceeding, this time can be used to source the title deeds and draft the contract so that it is ready to go the day the property goes sale-agreed. This contrasts with vendors who wait until sale-agreed before engaging a solicitor often resulting in delays of weeks between sale-agreed and the sending of the contract to the buyer’s solicitor. Such delays jeopardise the sale as the buyer may see another property on the market while these delays persist so it is always wise to swiftly follow up an agreed sale with the contract for sale to keep the momentum moving.
Typical Timeline of a Conveyance
Weeks 0 – 2:
The conveyancing process starts with the issuance of a sales advice notice by the estate agent to the solicitors representing the buyer and the seller. This is a simple, one-page document which conveys the price agreed, whom the buyers and sellers are, as well as listing the solicitors representing both parties. As mentioned, it is far from ideal for the sales advice note to be the first indication that the vendor’s solicitor is given that the property is being sold. Ideally, he will have been advised while the property was for sale and already has the contract and associated documentation ready to send to the buyer’s solicitor. If not, he is somewhat on the back foot now and needs to first-off request the deeds, a process that can take weeks, and collect additional documentation before finally being in a position to send the contract. Meanwhile the buyer’s solicitor applies for the mortgage and raises pre-contract enquiries to the vendor’s solicitor. The buyer’s solicitor advises the buyer to arrange for a bank valuation (if required for mortgage approval) and pre-purchase survey to be conducted. Buyers can browse quotations from chartered surveyors here
Weeks 3 – 4:
The buyer’s solicitor reviews the Contract for Sale, the pre-contract enquiries and planning searches. If there are any amendments needed in the contract, they are advised to the vendor’s solicitor and amendments are made with mutual consent of both sides’ solicitors. If there is no need for any amendment and the buyer’s solicitor is content with the results of all searches as well as the pre-purchase survey, they request the buyer to review and sign the contract. At this stage, the buyer’s solicitor also advises the buyer to conduct a final walkthrough to check if the vendor has adhered to any agreed repairs or conditions. Once the contract is signed by the buyer, it is sent to the vendor’s solicitor along with a cheque (or bank transfer) representing 10% of the purchase price by way of a deposit. The process could delay at this stage if the mortgage approval for the buyer is delayed from the lendor’s end or if the buyer is in chain, i.e. the purchase of the property they are purchasing is subject to the sale of the property they are selling.
Week 5 – 6:
The vendor’s solicitor liaises with the vendor to sign the Contract for Sale. Once the contract is signed, they are immediately exchanged with the buyer’s solicitor, and a mutually agreeable closing date is confirmed. Once the signed contract is exchanged with the buyer’s solicitor, the contract is legally binding on both parties.
Week 6 – till the Closing Date:
On the mutually agreed closing date, the buyer’s solicitor hands over (typically via courier) a bank draft (or bank transfer) for the balance of the purchase price, and the vendor’s solicitor hands over the keys of the property and the title deeds. If the keys of the property are with the estate agent, then the estate agent is informed by the vendor’s solicitor to release the keys to the new owner. The buyer’s solicitor goes ahead with the stamping of the Transfer Deed with the Revenue Commissioners, and the registration of title. This marks the conclusion of the conveyancing process.
Reasons for Delays in Conveyancing
Delays in Acquiring Title Deeds:
Very often, a lending institution will be holding title deeds to a property as these were handed over when the lending institution granted a mortgage for the purchase of the property. While some banks are better than others, getting your hands on the deeds can take weeks; again this is why emphasise the benefit of getting a solicitor onboard as early as possible in the process.
Queries or Negotiations After the Pre-Purchase Survey:
Buyers will typically send a surveyor to carry out a pre-purchase inspection of a property before they sign the contract. If the survey shows up unforeseen issues with the property, buyers may look for a reduction in the sale price to allow for the required repairs to be made. Alternatively, the buyer may insist that the repairs are made by the vendor. If the issues are of a wear and tear, minor nature that were apparent during the viewings, then the vendor will likely resist this changing of the goalposts post sale agreed. However, if genuinely unforeseen issues are uncovered, then some post-sale-agreed negotiation may take place.
The buyer will want to ensure that they are not inheriting the responsibility to pay any historic bills. If the property is in a multi-unit development for example, then the buyer will want to be sure that the management charges are paid up to date and that the OMC (Owners’ Management Company) is in a healthy financial position. Another example would be that the buyer would need to be satisfied that the LPT has been fully paid up for the current year.
When a developer builds a multi-unit development for example, the developer must transfer the ownership of the communal areas to the OMC. We have seen sales fall through owing to this never happening and ambiguity as to who actually owned the communal areas. While on a day to day, practical basis, those living in the development enjoyed unrestricted access, the buyer’s solicitor was not happy to recommend their client to sign and the sale fell through. Another example would be of a housing development not taken in charge by the local council.
One of the Parties is in a Chain:
Sometimes a buyer will sign a contract “subject to the sale” of their own property. If their own property isn’t selling or achieving the desired price, then this can scupper the sale. Likewise the vendor may be willing to sell as soon as they secure a new property to purchase; if they can’t find a suitable property, then again this can delay and potentially derail a sale.
While these issues do arise, with goodwill and common sense on both sides, they tend to be quickly resolved and the deal gets done.
How Much Does Conveyancing Cost?
When buying or selling a property, the buyers and sellers alway rightly focus tightly on the sale price of the property with the vendor seeking the highest and the buyer pushing for the lowest price. All too often though, the costs of completing the transaction come as a bit of an unwelcome surprise.
For both the buyer and the seller, the conveyancing cost is made up of the professional fee to the solicitor for their time and expertise as well as outlays which are costs incurred by the solicitor in completing the transaction – these outlays must be reimbursed to the solicitor i.e. they are paid for by their client so it is important to be aware of these somewhat hidden costs.
For the vendor, the costs aren’t too punitive, particularly if you shop around and outlays are negligible – perhaps €50 for courier fees. However, for buyers legal fees and outlays can mount up quickly again underscoring the need to make sure you don’t overpay. Auctioneera’s real time conveyancing quotation engine allows vendors and buyers alike to get a detailed quotation, including outlays, in real time for their particular purchase / sale.
What Are Outlays?
As the buyer / seller are liable to reimburse their solicitor for outlays incurred by them in completing the transaction on their behalf, knowing in advance what these will be is crucial as they can amount so several thousand Euro, particularly for the buyer.
Property/Land Registration Fees:
These are the costs incurred during registering the title with either the Registry of Deeds or the Land Registry. The fees rise with the value of the property as per the below table. These are paid by the purchaser.
|Purchase Price of the House||Land Registration Fees|
|Up to €50,000||€400|
|€50,001 – €200,000||€600|
|€200,001 – €400,000||€700|
|Greater than €400,000||€800|
Stamp Duty is the tax on the purchase deed payable by the buyer when the sale is closed. It depends on the purchase price of the house. It is 1% of final purchase price up to €1m and 2% on excess over €1m. This typically amounts to several thousand Euro so must be factored into buyers’ budgets.
Mortgage Registration Fees:
A fixed fee of €175 is paid if a mortgage is raised on the property.
Planning searches are enquiries that the buyer’s solicitor makes on behalf of the buyer to make sure the house is free from any issues that could cause issues for the buyer post the purchase. These are pre-contractual searches and need to be completed before the contracts are signed. These include but are not limited to building plans, building restrictions, environmental threats like flooding, ground stability and compulsory purchase orders. The cost of planning searches depends on the property being purchased.
The closing searches are conducted on the day of the closing consisting of land registry search, judgement search, bankruptcy search and so on.
These are not significant for either the buyer or the seller.