The timing of your payments and outlays when buying property-the essential guide

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Are you a first-time property buyer? If you are you may have some concerns and worries about the timing of the various payments you will need to make to buy your first piece of real estate.

Let’s take a look, shall we?

The first payment you will be expected to make will be a booking deposit once you go sale agreed on a property. This will be paid to the estate agent handling the sale of the property and is fully refundable.

The sum involved can range from €2,500 to €10,000 but would typically be €5,000 for a property in the price range €250,000 to €400,000.

The next payment you will need to make will be the contract deposit. This is 10% of the purchase price and will be payable when you are signing the contracts of sale. You will be given credit at this stage for the booking deposit so that sum will be deducted from the contract deposit.

Let’s take a look at an example. If the purchase price of the house, you are buying is €300,000 then the contract deposit will be €30,000 (10%). Assuming you have paid a booking deposit of €5,000 you will have to pay €25,000 when signing the contracts.

The next money you will have to pay out to complete the transaction will be the balance of the purchase price together with the other associated costs and outlays. These will include:

  1. Solicitor’s professional legal fee
  2. Stamp duty
  3. Property registration authority fees
  4. Commissioner for oaths fees
  5. Legal searches costs
  6. Miscellaneous outlays
  7. The balance of the purchase price of the property
  8. Any LPT and/or management company apportionment you will be liable for

All of these will need to be sitting in your solicitor’s client account before the transaction can complete.

The time period between signing the contracts and completion will vary from property to property and depending on whether it is a second hand or new build property.

If it is a new build, you could have a gap of 6 to 12 months between signing the contract and completion of the house and transaction. With a second hand house you can expect 4 to 8 weeks of a delay from signing to completion.

Between the signing of the contract and closing of the transaction you may incur two further outlays:

  • A surveyor’s report fee
  • A valuation fee for the required valuation of the property for the bank

A word of warning: the lender will not release the loan funds until all the conditions of the loan offer have been fulfilled. These conditions will include the putting in place of acceptable life cover and home insurance and the securing of the bank’s interest in the property.

Obviously, if the loan is not released the sale cannot complete and you will be frustrated at what you may see as an unnecessary delay. You may also have to update wages slips and confirmation of your employment status. Check with your lender or mortgage broker.

And remember, too, that there is no point putting life assurance in place and taking out a new policy if the benefit of that policy has not been assigned to the lender.

Rather than getting frustrated with any delay, however, you should check the conditions of your loan offer and give the bank what they want.

Remember: they have the money.