As everything in our daily life gets faster more people are beginning to question why a house purchase/sale is so slow. Surely with the advent of technology in all our lives there must be something that can speed things up to get a completion sooner rather than later?
Solicitors will tell you that it will take 4-6 weeks at best with all parties moving forward without any undue delay.
You must appreciate that there are five plus parties involved in any purchase.
These are;
- The financial institution;
- The seller’s Solicitor;
- The buyer’s Solicitor;
- Local authorities in relation to various certs that may be needed;
- The buyer and seller themselves.
All parties have to be interested in getting the matter forward to a completion. For example, with the urgency of getting a house up for sale in the Summer “Selling Season” the seller may not have all the required certificates that the buyer wants. There can be certificates in relation to local property tax or if there is was an extension built on to the house which did not get planning. If the property was rented a tax called NPPR was payable for some time and is now replaced by the local property tax. Certs for all these will be required especially if there is bank finance being obtained.
If the property is serviced by a Septic Tank has it been registered with the local authority?
In the UK they are trying to move things forward and have taken more steps than we have here in Ireland.
There is a proposal now that before the seller can actually put their house for sale they must confirm that they have all the certs and permissions in their possession before putting the house on the market. Remember if selling your house and the Bank have your deeds it can take 3 weeks for them to send to your solicitor. Some even require your Solicitor to sign a particular type of letter which again can lead to delays.
It may well be to the advantage of the seller if a property is sold that they have six weeks to clarify the removal of furniture, and make alternative accommodation arrangements.
They have found in England that the local authorities vary widely as to how efficient they are in producing certificates and/or planning permissions. These may not be already in the seller’s possession. In Ireland there is usually a demand for a fee to produce any letters/ certificates with the local authorities.
The other issue which may delay is the fact that paper contracts must be sent from one office to the other for signature and then sent back again. There is a move towards digital signatures but again this is not something that is being pressed by the Government in either Britain or Ireland at present.
The banks for their part, although now are concentrating very heavily on selling mortgages again, have not spent money on their “back office” supports. Very often there is a shortage of experienced personnel in the banks dealing with issues which arise on the paperwork for the lending for funds. Whilst they are very good at giving loan approval at the front end by the time the cheque issues following this up there may be delays. The banks for their part very often limit the actual time when the loan offer is available for. A delay at the seller’s end in producing the documents can mean the buyer’s loan approval can go out of date and a re-application must be made.
A brighter area is for the Land Registry once the property sale is closed. The Land Registry are now called the Property Registration Authority and they are very much up to date with technology as are the Revenue Commissioners. A stamp duty charge of 1% at present applies on all sales and the Solicitor for the buyer will go online too and pay the Revenue and in turn print out a certificate which is attached to the final Transfer Deed to show that the Revenue have been paid. Online transfer of funds is the way the Revenue now operate. The PRA for their part have online facilities and a copy Folio showing the title can be printed off for €5.00 and a proper copy with a map of the property can be requisitioned and forwarded within 7 days which is a big improvement on the old days.
In commercial property transactions it is now common that all of the questions are asked before contracts are signed. For a house purchase/sale the opposite is the common rule. Both parties are interested to tie each other in to the deal so the contract gets signed first and then the queries in relation to any issue concerning the property are asked. In theory if these are not met to the purchaser’s satisfaction the purchaser can back out of the contract and get their deposit back.
There are suggestions now that the practice in commercial transactions should be followed in domestic transactions and all matters should be “on the table” before the contracts are actually signed so that the purchaser is well aware of all facts and no further investigation is necessary after they sign the contract. When the contract is signed then the Transfer can be signed at the same time.
In terms of suggestions to improve matters, things move slowly and unless there is either political pressure or consumer pressure to move things on in terms of speed the present system will only move forward “at the speed of the slowest member of the Chain “.
Time will tell.