Conveyancing is the term commonly used in real estate to describe the act of legally transferring property from one party to another, the transfer of legal ownership of land, building or home. A conveyance is done using an instrument of conveyance, which is a legal document such as a contract, lease, title, or deed, which outlines the obligations and responsibilities of both the buyer and seller including the purchase price, date of transfer, and any other terms and conditions associated with the sale. The documents provided for conveyancing typically include the deed, mortgage documents, certificate of liens, the title insurance binder, and any side agreements related to the sale.
6 Stages of The Conveyancing Process:
1. Sale agreed
2. Letter of loan offer from your bank
3. The pre-contract enquires
4. Contracts for sale
5. Completion of sale
6. Stamp duty and registration of Title
Sale Agreed
With the help of an estate agent/auctioneer, a buyer and seller will agree on a purchase price and once an offer is accepted, the purchaser will pay a refundable booking deposit to the estate agent. The booking deposit may vary, but generally estate agents seek in the region of 5% of the purchase price. It is important to note that at this stage, the deposit is still refundable and there is no binding agreement made.
If you are selling property, it is vitally important to appoint a solicitor before you put your property up for sale. If you are buying a property, appoint a solicitor as soon as you go sale agreed. He/she will oversee the transaction and act in your best interests, while ensuring the process is conducted as efficiently as possible.
If the property you are buying is second-hand, your solicitor should strongly advise you to get a full structural and planning survey carried out by a qualified architect/engineer; as once contracts are signed, the purchaser agrees to take the property in its current state of repair and condition, therefore it is imperative this be carried out prior to signing.
Letter of Loan offer
The Vendor’s (seller’s) solicitor will liaise with the purchasers (buyer’s) solicitor and will draft Contracts for Sale for the property, and send them to the purchaser’s solicitor, along with the Title Deeds of the property, and any other relevant information pre-contract.
If a purchaser is taking out a mortgage, the bank will generally require the purchaser to instruct a solicitor and will then send the relevant mortgage documentation directly to the purchaser’s solicitor to be reviewed and be signed in their presence by the purchaser’s. Prior to signing, the solicitor will advise and explain all terms and conditions relating to the contract.
Pre-Contract Enquiries
Once the solicitor receives the Title Deeds, he/she will investigate them and raise any queries that may cause concern, such as rights of way, planning or environment issues. Only when the solicitor is satisfied with the vendors (seller’s) response, will they instruct the purchaser to sign the contracts. Once the contracts are signed the purchaser has some ‘peace of mind’ knowing that the property they wish to purchase is ‘above board’ and has, what is known as ‘a good marketable title’, if later down the line, they wish to sell the property themselves.
The bank will require ‘a good marketable title’ as a condition for the loan, and the solicitor will then make an ‘undertaking’ to the bank, which is a legal promise to the bank that the loan funds will not be used until the marketability of the title has been confirmed.
Contracts for Sale
Once the Title deeds have been investigated by the purchaser’s solicitor and the terms and conditions agreed, the solicitor will witness the purchaser sign the contracts and then return them to the vendor’s solicitor. Upon signing both parties are now bound to complete the sale. The purchaser will also send a ‘contract deposit’ to the vendor’s Solicitor. This is generally 10% of the purchase price less the booking deposit previously paid by the purchaser. Once this is completed and finalised, the purchaser’s solicitor will draft up a ‘Deed of Transfer’ and send to the vendors to be signed. A closing date will be now agreed between the two solicitors confirming the date the purchasers can collect the keys to their new property and move in.
The purchaser’s solicitor will then send a list of questions known as ‘Requisition on Title’ to the vendors solicitor. Further inspection of the title now occurs. Once completed by the vendor, the ‘Deed of Transfer’ and the ‘Requisition on title’ are returned to the purchaser. Meanwhile the purchaser’s solicitor will contact the bank regarding the draw down of their loan funds. The bank will require you to take out a life insurance policy and home insurance policy prior to the release of the funds.
Completion of Sale
A closing date is now agreed by both solicitors, where the remainder of the purchase price is paid to the vendor (seller) and the purchaser (buyer) moves into their new property. If the property is newly built, the solicitors will arrange the closing date once a Completion Notice is issued by the builders. A snag list is drawn up detailing any unfinished works in the property. It is advisable to instruct an architect or surveyor to do so before close of sale. It is also advisable for the buyers to ensure that all unfinished works detailed on the snag list are taken care of and completed.
On the day the sale closes, Revenue, Bankruptcy, Judgement and Sheriff ‘Searches’ are carried out by the vendors solicitor, on both the vendor and purchaser and once satisfied, the remainder of the purchase price is released to the seller’s solicitor. The keys are then given to the purchaser and the purchaser can finally move in.
Stamp Duty and Registration of Title
The final step of the process is to get the Revenue Commissioners to stamp the ‘transfer deed’ and secondly registering the title with the Property Registration Authority. Stamp duty is based on the type and cost of the property, for example residential properties in Ireland valued up to €1m, the stamp duty is 1% of the purchase price.
