Anyone else looking to buy a house?

Lyn256

Hi all

I'm looking for a bit of feedback on two things-

I'm looking to buy a 4 bed house in west dublin-I've been watching the market since Aug and while I haven't seen a property that meets my criteria yet-I'm stumped at the way the market seems to be working at the moment.

We put our 3 bed house (west dub) up for sale in late aug-got a very realistic estate agent and sold the property within 6 weeks. (we sold for 5% less than asking though we put the house up for a 'realistic' price-the lower end of what we'd been advised the house would make)

We are now renting and watching to see what happens to the market in the coming months. However, hubbie is getting cabin fever in the rented house and would like to buy sooner and be back in our own home.

The thing is, I checking out myhome.ie and daft.ie despite being on the market for months-I'm not seeing many properties being reduced despite being on the market for months and since we've sold, two other very very similar properties have come up for sale within our old estate-one was up for over €20k more than we put ours up for sale (its since been taken off the market) and the other that came onto the market last week is €2.5k more than ours went up for in Aug. Neither of the properties were as up to date as ours (we'd spent over €20k on a new kitchen and bathroom only 18 months before we sold)

Anyway, is there a major lack of realism in the market-I mean-are estate agents trying to keep prices up and/or misleading their clients as to what will sell?

Secondly, any feedback as to where to go to get a mortgage? I know from selling our house that the buyer had a load of cr*p to deal with the building society (lost documents, promised info on a monday and not getting it til a thursday-the sale took almost 3 weeks longer than originally anticipated)

We're in a very strong position, looking for a mortgage less than 50% value of house we hope to buy. We've no outstanding debts and what we'd want would be about double my hubbies salary. So who's giving out mortgages and any tips in going to get one.

We'd been given the name of a mortgage broker who has just come back to say that he can arrange a loan but he wants to charge us €500 for the privledge.

Feedback welcome

Thanks

antoinolachtnai

I would suggest that you really need to talk to everyone you can to get a good deal.

Why not go back to the provider who gave you the mortgage before?

As for prices of properties, have you introduced yourself to all the local estate agents? In particular, have you talked to the guy who sold your house for you? If he knows you are genuine and have money ready to go, then he might be able to find the right thing for you.

As for prices - it depends on the sort of area and sort of people living there. In some areas, there is no real pressure on people to sell. So they hold on, rather than selling. The problem isn't the price, the problem is that there is no market, i.e., willing buyers and willing sellers cannot agree a price that they want to transact for.

Don't take prices you see on websites too seriously either. Estate agents, particularly larger ones are going to be very reluctant to publicly drop prices in a big way, for all sorts of reasons.

It's not a matter of lack of realism necessarily, though it could be. It's just that for some people, they are not in any rush and if they cannot achieve a particular price, they are as happy staying put.

Lyn256

Thanks antoinolachtnai

Am regularly in touch with the agent I used-in fact he leafleted the estate we're interested in before Christmas for us.
I've gotten in touch with the most the other agents locally and have yet to have any follow up with me and say that they have a house that might interested in.
Granted there haven't been any houses that fit my criteria so I'll give a little credit there.
Also, I feel that the major agents in the area are over valuing property so i don;t really want to buy from them

True true about why people might not be selling at the moment-I'm looking at much older established estates where many people would have bought before or in the early part of the boom

antiskeptic

Lyn256 wrote: »

Hi all

Hi.

We are now renting and watching to see what happens to the market in the coming months. However, hubbie is getting cabin fever in the rented house and would like..

Since a house purchase (especially in as unstable a climate as ours) is about the most significant purchase a person can make), what a person would like to be the case needs to focus on sound rationality. Cabin fever doesn't qualify.

There are a lots of subjectives to be talked about but some clear objectives include:

- you've sold your house and now have cash in hand.

- you're a very good bet for a lender - maybe not this second when all is shored up, but when the crisis settles and lenders get back to doing what makes them money, you'll sit in prime place for a loan.

- house prices are still dropping faster than rent will be absorbed by waiting (unless you're living it up)

- countering all other objections: there will be absolute bargains to be had to he who waits.

It'll take patience, it'll probably take some worry, it'll take work to become intimate enough with the market to know when you're onto a winner. But if you do that, you'll get what you want/need for a fraction of the money you'll lay out if you hurry.

The expression "marry in haste, repent at leisure" could equally be applied to house purchases.

antoinolachtnai

Yeah, people in those estates are probably not leveraged enough to be desperate to sell, but not old enough to downsize or to die. Also, their relationships are probably quite stable (divorce/separation is a major generator of house sales).

You might need to look further afield, taking this into account.

Agents do not really value houses. It may seem that way, but they don't, certainly not at a time like this. The market values houses. The problem is that there is no market, because there is a wide gap between what buyers are prepared to accept on the one hand and what sellers are prepared to pay on the other.

Lyn256

Thanks antiskeptic! Thanks antoinolachtnai!

Ah yes patience is indeed what we need!

I'm very happy to keep renting for the next few months or many months! Personally I don;t think that the market is near the bottom yet and you have made many points that I agree with.

As we haven't actually seen a house that we want to buy-I'm not in the slightest bit stressed. Am just frustrated with what I see as many overpriced houses and badly advised sellers.

My own gut feeling is to sit tight and keep sitting tight-every month that passes the amount of money that we will need to borrow falls

biblio

Hi OP,
Yes I agree with you there appears to be a lack of realisim in the market in certain locations, I have been looking to buy with a few months but around here (north cork county ) prices seem to be artificially held at inflated levels for some reason. But 30 miles north in tipperary asking prices are at a way more realistic level I cant figure it out anyway on mortgages talking to both PTSB and AIB recently they seem eager for mortgage business to clients with attractive LTV ratios like you need

the_syco

OP: why did you sell your old house, and where do you wish to live now? Are you trying to "move up the ladder" (or some such Celtic Tiger sh|te), or what?

If looking for a home, name your area and price, and we can say where to look, but if trying to trade up, what are you trying to trade up from, and to what?

Lyn256

Does it matter why we sold?? Thats not the feedback I'm looking for.

Yes, trying to trade up-Have 2 children under 3 and need more space, bigger garden and access to better schools. Love the area I live in-been here for last 10 years, am renting 5 mins from where I lived and now looking to buy.

the_syco

Looking at some of the prices of the newer built estates nearby me, I see insane prices, all above €400,000, with all older around the €300,000 mark (most of which had bedrooms added to original build). Any second hand homes built in the last 5-10 years won't be cheap and I can't see many of them getting sold, but I pity the fools who buy them.

Lyn256 wrote: »

Does it matter why we sold?? Thats not the feedback I'm looking for.

Yes, trying to trade up-Have 2 children under 3 and need more space, bigger garden and access to better schools. Love the area I live in-been here for last 10 years, am renting 5 mins from where I lived and now looking to buy.

If you sold because you had to get out of a hell hole, you may have sold it at a loss, and now looking for a house to live in. As you sold your house so that you could get a bigger one, you probably have money to allow you to rent for a while. Also, as your kids are not yet of school-going age, it gives you more options on where you'd like to locate to - you are not constrained to the proximity of a certain school.

I'll split the houses for sale into two groups: new houses, and old houses (that have their mortgage paid off). I can't see the new houses going down that much, as people still owe stupid amounts of money for them. The old houses are the ones that should drop, as they can, but greed alone seems to be stopping this, or for some reason they're trying to keep the prices up near the new houses?

Can't see the "new houses" price come down, not until the house is paid off, but I'd say the "old houses" price will drop, but at a sooner time.

A bit tired after a long weekend, so apoligies if this makes little sense: will re-jig it if I remember tomorrow.

Lyn256

Many thanks again for the replies.

Yes, we have the money to rent-we are in a strong position as we had good equity in the house we sold.

To be honest we're looking for an older house as we'd like to go to a more established area-in fact are renting in an estate to 'try it out' to see if we'd like to live here long term and so far we love it (not mad about the house itself-but thats rented houses for you, but really like the estate)

On a separate note, have just noticed on myhome.ie that a house in one estate that we are interested in has gone sale agreed-its been on the market for at least 4 months maybe longer and I figure that it sold for well under the asking price-any suggestions as to how I can get the sales price from the EA.

I rang the EA before Christmas as another house that we'd been sort of interested in that had sold but, to be honest, I didn;t actually believe the agent when he told me what it sold for. (He said they achieved €350k after being on sale for 6 months at €375k (previously on market for €415k for previous 6 months)) we viewed it months ago and even then the agent agreed that €375k was too high for what it was.

So I'm thinking of one of the following-getting my Mam to phone in and say she lives in the estate-is thinking of moving and might be interested in using them as an EA and what price did the houses sell for or getting one of my friends to phone in and say they are interested in buying on the estate and see what they are 'actually' sold for
(Also spoke to my own EA bout this house months ago- before it sold he said that in his opinion they'd be lucky to get €320k)

Thanks

Lyn

ellejay

have you considered just knocking ont he door and asking them what theysold/bought for?

sure all they can say is no!!!

(personally i wouldn't belive the Estate Agent)

Lyn256

Had thought about it
Thought it might be a little rude!

Have my friend giving the EA a buzz in the coming days so should have a better idea then!

robd

Am in a similar situation although I sold nearly 7 years ago now.

Market is completely dead unfortunately. It's a Mexican Stand off. With the change in stamp duty giving a boost to sellers expectations I can't see this changing in the short term either.

Can't see any of the big necessary drops in asking price and increase in supply until Property Taxes are introduced and there'll be a lot of messing there. Labour as a coalition party will likely try to block all moves in that area.

When we get the cabin fever feeling it's usually an indication of a need for a big holiday or moving to a new/better house.

Best of luck.

antiskeptic

For the OP (or anyone else considering a purchase in the near future) this is probably worth a re-read. As predicted, the ECB takeover of Ireland has taken place - with the next step outlined below appearing perfectly rational.

Morgan Kelly wrote:

The other crumbling dam against mass mortgage default is house prices. House prices are driven by the size of mortgages that banks give out. That is why, even though Irish banks face long-run funding costs of at least 8 per cent (if they could find anyone to lend to them), they are still giving out mortgages at 5 per cent, to maintain an artificial floor on house prices. Without this trickle of new mortgages, prices would collapse and mass defaults ensue.


However, once Irish banks pass under direct ECB control next year, they will be forced to stop lending in order to shrink their balance sheets back to a level that can be funded from customer deposits. With no new mortgage lending, the housing market will be driven by cash transactions, and prices will collapse accordingly.


While the current priority of Irish banks is to conceal their mortgage losses, which requires them to go easy on borrowers, their new priority will be to get the ECB’s money back by whatever means necessary. The resulting wave of foreclosures will cause prices to collapse further

http://www.irishtimes.com/newspaper/opinion/2010/1108/1224282865400.html



To my mind, the only way to know the market has reaching the bottom is to wait for house prices to rise by 2%. You'll have missed the actual bottom by a few thousand euro but will have also missed out on the risk (and embarrassment) of stepping into negative equity at this late, post-Tiger juncture.

the_syco

Lyn256 wrote: »

On a separate note, have just noticed on myhome.ie that a house in one estate that we are interested in has gone sale agreed-its been on the market for at least 4 months maybe longer and I figure that it sold for well under the asking price-any suggestions as to how I can get the sales price from the EA.

I'd say it'll be back on the market in a month, with different photos. Have heard of this tactic for houses that have not been sold. Looks like it was done previously to the same house, so I'm thinking it'll be on "sale" again, along with some BS excuse...

lion_bar

I know you said that the house you were in now wasn't the perfect house, but if it's in the right estate would you ask the landlord to sell to you?

liger

antiskeptic, The article that you quoted states that banks will stop lending and the market will go back to cash transactions.

How many people would have the abilty to pay for a house in cash??? not many. Is the government going to stand by and let europe dictact that banks will freeze out so many people from borrowing? I honestly think morgan has that one wrong.

And if the banks were to stop lending do you not think some people would rush and get the mortgage now instead of waiting 5 years.

Also if landlords know that banks are not going to lend to the vast majority ( I'm sure golfing buddies will be okay for a lend of whatever they need ) wouldnt this just push rental prices up higher instead of bringing them in the direction they're needed????

gurramok

robd wrote: »

Am in a similar situation although I sold nearly 7 years ago now.

Market is completely dead unfortunately. It's a Mexican Stand off. With the change in stamp duty giving a boost to sellers expectations I can't see this changing in the short term either.

Can't see any of the big necessary drops in asking price and increase in supply until Property Taxes are introduced and there'll be a lot of messing there. Labour as a coalition party will likely try to block all moves in that area.

When we get the cabin fever feeling it's usually an indication of a need for a big holiday or moving to a new/better house.

Best of luck.

First time buyers just got stung with a 2% tax and you need sufficient numbers of these to hold the market up. Along with the economy(have you seen your January pay cheque?), there is nothing supporting prices at their current levels. Sellers need to get real.

On the govt front, a change in govt will be a good thing as the opposition have much less of an interest in supporting the "property industry". Hence hopefully NAMA will start some firesales.

Lyn256

Many thanks for all comments!

Antiskeptic-that article makes for very interesting reading. Isn't Morgan the one commentator who has gotten almost everything right in his writings of the last few years??

the_syco-Mmm, hadn;t hears of that happening-but I'm checking myhome.ie/daft.ie etc weekly so I'd easily spot it

Lion_bar-good suggestion but we're renting a three bed that would need a lot of work to get it to our taste and standard-however I'm still getting to know the estate and have spotted a number of properties that I would be interested in should they come on the market. There is another estate adjacent to the one we're in and , to be honest, thats where I want to buy!

liger-interesting comments

Many thanks again

antiskeptic

liger wrote: »

antiskeptic, The article that you quoted states that banks will stop lending and the market will go back to cash transactions.

It's not that they'll stop lending, it's that they'll stop lending at below cost - which will effectively stop lending. The argument would be that borrowing at 8% to lend at 5% is an unsustainable and that Europe won't tolerate it.

Remember - a central objection to IMF intervention has long been that they make you operate in a fiscally responsible manner - come hell or high water. If that means mass job losses so be it, if that mean house prices are let drop then so be it.

How many people would have the abilty to pay for a house in cash??? not many.

Anyone who sold up in the good times and didn't re-purchase would be able for it. I'd say there's a fair few of them. Bear in mind that buying a house for cash could be rendered a lot easier if we're not (as Morgan would seem to think) near the bottom yet. He was suggesting price drops for a period of 8 years or so (based on analysis of housing boom/bust cycles since the 70's). So a few more years to go yet.

Is the government going to stand by and let europe dictact that banks will freeze out so many people from borrowing? I honestly think morgan has that one wrong.

Er.. the government have already handed over the reigns to Europe. Didn't you see the IMF roll into town a short number of weeks ago?

And if the banks were to stop lending do you not think some people would rush and get the mortgage now instead of waiting 5 years.

Let them rush. The banks aren't lending-at-a-loss because they want to, their lending-at-a-loss to the fewest amount of people it takes to maintain the sense that there's a viable housing market out at current prices. This is done in order to stave off further house price drop > which leads to further mortgage default > which leads to further house price drop > which leads to....

Or so Morgans perfectly rational argument goes.

Consider folk paying a 500k mortgage for a house now worth 300k. Consider how pissed those folk are at the sacrifices being made to pay off a mortgage they were in many ways suckered into taking out. In a time of severe fiscal stress and worry for many. Folk will tend to focus on the them being suckered out and not on the part they themselves played - we're all human afterall. Now, consider their attitude if their house's worth falls to 200k. To 180k? To 160?. A point comes where the mickey will no longer be taken. And defaulting becomes the preferred option. And once that ball get's rolling, once there's some social momentum behind it, there'll be no stopping it - and the 2nd Tsumani of large scale mortgage defaults will come rolling into shore.

Also if landlords know that banks are not going to lend to the vast majority ( I'm sure golfing buddies will be okay for a lend of whatever they need ) wouldnt this just push rental prices up higher instead of bringing them in the direction they're needed????

Are you aware of the numbers of people who have left the country in recent times - whether foreign nationals or nationals. In many cases they used to require a rented roof over their heads. But not any more. And it's not like there wasn't barrel loads of people getting into the buy-to-let market right up to (and even into) the bust. There is market overhang in the rental sector - just read some of the landlord stories in this very forum.

-

The trouble with Morgan Kelly is that his arguments make sense. And that they've been proved right in the main so far. And that he's basing his argument on housing boom/bust trends going back 40 years. Why should what happens here be any different to what always happens in these cases?

brian__foley

Lyn256 wrote: »

The thing is, I checking out myhome.ie and daft.ie despite being on the market for months-I'm not seeing many properties being reduced despite being on the market for months and since we've sold, two other very very similar properties have come up for sale within our old estate-one was up for over €20k more than we put ours up for sale (its since been taken off the market) and the other that came onto the market last week is €2.5k more than ours went up for in Aug. Neither of the properties were as up to date as ours (we'd spent over €20k on a new kitchen and bathroom only 18 months before we sold)

Anyway, is there a major lack of realism in the market-I mean-are estate agents trying to keep prices up and/or misleading their clients as to what will sell?

This would be retty much my recent (last 6 month) experience for certain types of property in certain locations. Obviously there are new-builds and apartments being sold on receiver's instructions going for half of what they were at a few months ago, but as regards the "older" houses in Dublin 6,7, 8, not many (just in my experience) appear to be owned by people who need to sell and there isn't a huge interest in accepting very low offers on those types of property. Things are still far cheaper than before, but there are different markets within the property market and they don't all decline at the same speed.

There are great deals there if the deal is the one for you, but if you're looking at nice, two storey and mezzaine or over-basement Dublin properties with a garden and a few bedrooms, they tend to be older houses and more likely to be less encumbered by mortgages or security. The others out there in that class all need reversion from tenements.

I doubt its down to estate agents. Assume they get 1% on a sale (I have no idea what they get) and they have a house up at €400k. Would they rather wait for €4000 for two years or get €3500 after a few months? I'd guess the latter, but that probably only "kicks in" a while after it becomes obvious the property is not shifting.

I'd had many surprising conversations with agents along the lines of "yeah, the asking is too high right now, but that's what the client hopes to get". It's very hard to accept a massive drop in the asset you've been holding onto even if its irrational to refuse to accept the reality and that's just the nature of people in many cases.

Right now, my own unsophisticated view would be that its great to be a first time buyer, and not so great if you want to trade up to a family home that's not in an estate or new-build development.

It's far cheaper, and its much more realistic to believe you can get a better family home than two years ago, but we're not quite back to a university lecturer and a house-wife being relatively able to purchase a nice big house in Clontarf or Howth in comfort.

antoinolachtnai

I agree with your remarks about the different speeds of different parts of the market.

However, I would also add, that for some people, they are just better to hang on to the property rather than sell it below a certain price. A lot of people can hold out for years. This is actually situation normal in the Irish property market. Up until 1997 or so, the property market was really slow. Things took years to move.

I do not think a dropping property market is really good for anybody. Houses will be cheaper, sure but who is really going to give you finance? Renters probably have the best deal at the moment, although they face the problem of tenure.

brian__foley

There is also the unknown factor in that we don't really know how many properties were owned by multi-property owners investors who may be getting more time from the banks than others (or whose securities may have gone elsewhere).

For all we know, the NAMA securities are not simply apartments in Clonmel and new-build estates in Clane, but could well include a rake of developer owned houses in the currently "slower" end of the market.

It is tragic, but if you want a great deal in certain areas, you're depending entirely on human misery to get it. I still want it though.

mathie

gurramok wrote: »

First time buyers just got stung with a 2% tax and you need sufficient numbers of these to hold the market up. Along with the economy(have you seen your January pay cheque?), there is nothing supporting prices at their current levels. Sellers need to get real.

On the govt front, a change in govt will be a good thing as the opposition have much less of an interest in supporting the "property industry". Hence hopefully NAMA will start some firesales.

Aren't all the parties as crooked as each other?

who_ru

the purpose of NAMA is clear. separate bad assets from good assets in banks, and control many aspects of the property market, both commercial & residential in an effort to maintain artificially high prices so as to make banks more attractive for investors. this has clearly failed.

the banks here are completely dysfunctional, logically too i might add since they are controlled by a completely dysfunctional Govt, and unfortunately they are controlling the property market. they are obviously paying 8% for money at least, since this is approx what we are paying in interest for the IMF/EU bailout. privately the irish banks cannot access credit, nobody will lend them money. they then lend at roughly 5% making a loss immediately.

so those people with buy to let investments, or with large residential mortgages are not being put under any pressure by financial institutions to drop asking rents or asking prices as this would only devalue the assets that they own, making them more unattractive for investment.

and it's going to get worse before it gets better...
http://www.independent.ie/business/irish/new-capital-review-likely-to-increase-banks-losses-2511010.html


this is why the market is dead

brian__foley

who_ru wrote: »

the purpose of NAMA is clear. separate bad assets from good assets in banks, and control many aspects of the property market, both commercial & residential in an effort to maintain artificially high prices so as to make banks more attractive for investors. this has clearly failed.

the banks here are completely dysfunctional, logically too i might add since they are controlled by a completely dysfunctional Govt, and unfortunately they are controlling the property market. they are obviously paying 8% for money at least, since this is approx what we are paying in interest for the IMF/EU bailout. privately the irish banks cannot access credit, nobody will lend them money. they then lend at roughly 5% making a loss immediately.

so those people with buy to let investments, or with large residential mortgages are not being put under any pressure by financial institutions to drop asking rents or asking prices as this would only devalue the assets that they own, making them more unattractive for investment.

and it's going to get worse before it gets better...
http://www.independent.ie/business/irish/new-capital-review-likely-to-increase-banks-losses-2511010.html


this is why the market is dead

I wonder will we get to the point where €200K cash will buy you what is on the market now for €400k, assuming mortgages do actually dry up.