Sale Agreed on a Property - What Happens Next?
“What does sale agreed mean?” That’s not an uncommon question from a first time buyer. Buying a property is likely the biggest financial transaction you will make in your lifetime and it’s full of new experiences (viewing and making bids on properties for example) and at times the terminology used throughout the buying process can be confusing. This is not confined to just buyers of course; for sellers (also known as vendors) too, it might also be their first time selling a property and they might also be unsure of the steps in the process and most especially, they may not be sure of the process after going sale agreed.
So as a buyer, if you’re curious as to what “sale agreed'' refers to at this point, it likely means you’re close to being at that stage on a particular property. To get to that point, the selling agent will have requested a booking deposit. This amount can range from 2-5% of the overall asking price; it depends on the estate agent handling the sale.
As the seller, you would of course be fully part of the decision making process with your assigned agent so you would be aware of an imminent sale agreed notification. It should be noted that as part of private treaty sales, offers can be withdrawn at any point, even after going sale agreed. Offers can in fact be withdrawn right up until contracts are signed.
Common Questions Post Sale-Agreed
Q. How long after sale is agreed to completion?
The period of the sale after going sale agreed is called conveyancing. Conveyancing averages 100 days in Ireland currently.
Q. Is sale agreed legally binding?
In private treaty sales, being “sale agreed” on a property is not legally binding. Offers can be withdrawn and even a booking deposit can be refunded should you wish to withdraw your offer after going sale agreed on a private treaty sale.
Q. Can a seller pull out of sale agreed?
Both sellers and buyers can pull out of a property that is marked as “sale agreed”. Sellers pull out of sales for a myriad of reasons but it might be because their personal circumstances have changed and they’re no longer in a position to sell. If a seller pulls out of a property you’re sale agreed on, be sure to ask the selling agent for a reason, if only for your own peace of mind.
Q. Is sale agreed the same as sold?
Sale agreed is not the same as being “sold”. Once a property has been marked as “sold”, contracts have been signed and funds have been exchanged and the property sale has reached its conclusion. Sale agreed is the period before being sold.
You Need a Property Solicitor Before Going Sale Agreed
Ideally you should be researching property solicitors while you search for your house or apartment to buy. A reliable and efficient property solicitor is needed for the conveyancing part of the sale. Conveyancing begins once you go sale agreed. If you’re a seller, you should look to appoint a conveyancing solicitor once you decide to sell your property.
A conveyancing solicitor is essential to the buying and selling process and it’s so important to (a) select a good one (check reviews) and (b) that you keep the lines of communication open with them to keep up to speed on the progress of the sale. If you’re buying a new house, the conveyancing solicitor will as part of the process establish what fixtures and fittings will be included and if it’s a second hand house, the solicitor will also clarify in the contracts what the seller is taking with them and what are they leaving behind as part of the sale. For example, if the seller indicated the sale included furniture, then an inventory of items would be included in the contracts of the sale to be agreed upon by both parties' solicitors.
Post-Sale Agreed for the Seller
Aside from arranging to secure your property’s deeds (you should seek these at the stage before or simultaneously when you list the property for sale), there are a number of elements that will arise throughout the stage from sale agreed to sold. This period, known as conveyancing, is handled by your chosen property solicitor and it is covered extensively in our post - the hidden costs to selling property and in our conveyancing post - see below.
What is a Sales Advice Notice / Note (SAN)?
The sales advice note (issued by the selling agent to the solicitors) will detail the purchase price, the property address and the address of the purchaser's solicitor.
Extra Costs Post Sale Agreed for the Buyer
- Stamp Duty
Stamp duty is a tax paid to the purchaser’s solicitor at the same time of paying the 10% contract deposit. It amounts to 1% of the purchase price up to €1million and 2% for a property worth more than €1million. Stamp duty for new homes is the same but it is only applied to the price of the property minus VAT, (13.5% as of April 2022). Your solicitor will transfer the funds to the Revenue Commissioners who stamp the property deeds so they can then be registered in your name.
- Legal Fees
Property buyers should budget for around €1500 for this expense as part of buying
Your lender will have a panel of property valuers that they deal with for the purposes of valuations. This will generally cost €150.
- Property Survey
Typically you should budget around €500+VAT for a property inspection.
Your lender won’t release funds to your solicitor until they have confirmation that you have sourced home insurance as well as mortgage protection (or life insurance). You can realise significant savings in this segment of the purchase so be sure to shop around for the best prices.
Property Survey After Going Sale Agreed
For some purchasers, they’re unsure about the necessity of getting a property surveyed post sale agreed. There is no requirement / obligation to get a property survey but it may allay any concerns you have about the house or apartment. We have a post on the topic of house surveys i.e. the different types and why you should consider getting one - you can read it here: https://www.auctioneera.ie/why-house-survey-important. Even new build properties may benefit from a surveyor visit as the engineer can detail any “snags” that you might not be aware of and they can outline any required remedies
Post Sale Agreed & Lender Communication
You might be dealing directly with a bank or building society for your mortgage or you may be using a mortgage broker but either way, if your lender is happy with the valuation report and you have your documents and insurance all ready to go, they’ll send you a formal letter of offer. We have an example of what this looks like in our “Ultimate Guide for First Time Buyers”.
Walkthrough of the Property
A walkthrough of your chosen property is a standard request and one that the selling agent will be used to getting from purchasers. You can request this at any point once you go sale agreed on a property and it’s essentially like a private viewing of the house or apartment. You might use it as an opportunity to take some measurements for future furniture or just to visually survey parts of the property that you can’t recall. If you find any issues you’re unsure about following your walkthrough, get in touch with your conveyancing solicitor to iron them out for you in the contracts, for example if you were buying on the basis of furniture not being included but you noticed the existence of some items of furniture in one room, you can have it added that you require the property to be fully clear of furniture prior to the sale closing.
Getting the Keys of the Property
For property buyers, their main question usually is - when will we get the keys? That’s natural of course but it’s important to understand that once the property goes sale agreed and enters conveyancing, there are many things that can crop up along the way. As a general rule, conveyancing can take on average 100 days. This might come as a surprise to some purchasers but every property varies and some conveyances can be more complicated than others.
Contracts can now be signed remotely if needed via video call which is extremely convenient for most parties to the purchase. Signing this contract means you’re agreeing to buy the property. Your solicitor will then pay the balance of your 10% deposit, the mortgage cheque (if you’re depending on a mortgage to purchase that is) will be sent to your solicitor and the remaining funds will be transferred to the client funds account of the solicitor acting for the vendor.
Once the full balance of the property price has been paid and the vendor has countersigned the contract, the sale is legally binding. At this point, a final closing date will be agreed by both solicitors (seller and buyer). You might get the call from your solicitor as the buyer saying that the funds have been transferred and the sale has closed but it’s important to note that the selling agent (or the vendor’s solicitor - whomever is holding keys of the property) won’t release those keys until the funds have hit the seller’s solicitor’s client funds account. Essentially, the selling agent will have to receive confirmation from the vendor’s solicitor that the sale has formally closed.
At this point, you’re likely exhausted from the process as you fall in the door of your newly bought property… congratulations on getting from sale agreed to sold… and getting into your new home!