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Buying a Home in Ireland vs the U.S. - A Peak at the Cultural Differences
By: Glenda Jane Matheson, Realtor®, Partner with Realty Partners LLC
Buying a home in the United States is quite a different experience than buying a home in a European Nation. The process in Ireland, for example, has several differences that a Realtor® will need to be familiar with before proceeding with the transaction. In fact, agents in Ireland are not referred to as Realtors®, they are called real estate agents. In addition, Ireland requires a different set of procedures, and even the key players are different.
IN THE USA, WE WORK WITH:
Homebuyer and seller.
Listing agent (represents the seller).
Buyer’s agent (represents the buyer).
Mortgage broker or lender.
Home inspector and appraiser.
Escrow company and title company.
IN IRELAND, YOU WORK WITH:
Homebuyer.
Estate agent/auctioneer.
Surveyor/engineer (in Ireland, an attorney is called a Solicitor.)
Mortgage broker or lender.
The buyer’s solicitor.
The seller’s solicitor (the seller is referred to as a vendor.)
HOME SEARCH AND GAINING ACCESS
Ireland does not have a universal MLS system. Instead, they use different websites for home searches such as https://www.daft.ie. A Realtor® in Ireland needs to familiarize themselves with the many sites so that they can provide the best options to their clients.
In the U.S., the buyer’s agent is able to access any home a buyer is interested in viewing and can schedule viewings of multiple homes in one day. However, the Irish home buyer does NOT have their own estate agent. They arrange and coordinate viewings themselves. Homes are listed by an estate agent/auctioneer whose loyalty is to the home seller. A buyer has to contact the seller’s agent to show them a property, so the process can be very daunting for a prospective home buyer. In addition, an Irish real estate agent will only earn 1 to 2 percent commission on a transaction, and a deal can take up to 6 months to close.
MAKING AN OFFER ON A HOME
In the U.S., an offer must be accompanied with a pre-approval for the appropriate loan unless it is a cash sale, then Proof of Funds (POF) is required. In Ireland, the process is somewhat similar in this case. The buyer is required to provide proof to the seller that they have their financing secured or provide POF.
WHEN IS AN OFFER LEGALLY ACCEPTED?
In America, if both parties agree and sign the offer, then they have a legally binding contract. When there is a negotiation on terms (for example during an inspection period) these may change the original offer.
In Ireland, the buyer and seller only have a legally binding contract to buy/sell just before closing when contracts are exchanged and signed by both parties.
Although, the “sale agreed” may be on the sign at the start of the buyer/seller “agreement,” there is nothing legally binding with that initial agreement. The seller is completely free to accept a better offer from another buyer all the way up
to closing when contracts are exchanged, which can be 6 weeks or months after the sale was agreed, even if it is a cash sale.
The actual contract is drawn up by the seller’s solicitor (not by the estate agent) who sends duplicate (unsigned) copies to the buyer’s solicitor. The buyer then signs both copies of the contract, both of which are sent back to the seller’s solicitor. This is legally considered as an offer to buy the home.
The buyer is required to pay 10% at the signing of the contract less the booking deposit made at the offer/ sale agreed stage. Once the home seller signs both copies of the contract and delivers one copy back to the buyer’s solicitor, then the seller has legally agreed to sell the home to the buyer.
In the U.S., any offer should be contingent on a property survey. In Ireland, the seller is under no obligation to disclose defects in a property. Once your solicitor has checked the contract for sale, the Realtor® will sign it and forward it to the seller’s solicitors. Now legally the seller has agreed to sell their property once the contract has been signed by both parties.
KEY REMINDERS
The booking deposit is refundable up to the signing of the contract for sale. Until the seller has signed the contract, they can still change their mind. A 1% stamp duty tax on your new home up to $1 million, and 2% on any value above $2 million. Without this payment, the deeds cannot be registered. Once the sale has been completed, the deeds, showing new ownership and mortgage details (if applicable), must be registered with The Property Registration Authority (PRA).
