Buying Noob...any advice?

zuutroy

We've been looking for about 2 months and finally found a 4 bed place we both like a lot in Beaumont. It's on the market 2 months and last week it came down from the initial 300k to 250k. Other houses in the area are up on the sites for 300-350. Granted though that the one we looked as has been rented for a while and needs a bit of modernising, but nothing more than a good cleaning and painting and maybe new kitchen units.
Our docs are with the broker at the moment and he says we're 95% certain to get up to 220k.
The house is currently vacant. When we went there over the weekend the first thing the EA said was that they were 'accepting offers'. We said we were interested enough and it was a runner for us. They rang this morning first thing wondering were we interested/did we want a second viewing. There was another couple there as well on Sat and the EA said they were interested but waiting on approval etc. Is this often a standard line to get us into gear?
Anyway, we don’t wanna be stupid and get our hearts set on it and we’ll probably settle on a max of 235-240, but based on the 50k drop after only 8 weeks on the market and the EA seeming keen-ness we’re wondering what offer we should open with and how we should approach it.
IMO that’s a very good price, but of course these days ‘very good price’ is a highly subjective term.
Any advice appreciated!

noxqs

What is your question? You seem to have already been mesmerized by a price drop which is largely imaginary. From a high imaginary price to a less high price.

I'd wait, but your call. Greece is about to default which would have dire consequences for the IMF/ECB and therefore, the Irish economy.

ricman

whatever you buy now be aware in a years time it,ll be worth price now minus 20 per cent .I would nt presume the agent is lying re other buyers interested in the property .Just think i ,ll offer x amount ,theres plenty of houses for sale ,its a buyers market.
Dont tell the agent i have loan approval for x amount.Look at houses in the area that have garages or 4bedrooms,what are they going for.

the groutch

three important bits of advice:

1. don't borrow any more than 80% of the value when you buy. it should remove any risk of negative equity, and some banks will give a better rate for a sub 80% LTV

2. find out roughly what the monthly repayments would be, then stress test it for both a 3% increase in interest rate, and if one of you were to lose your job (salary - job seekers)

3. mortgage interest relief will be significantly cut at the end of the year, at the amounts you're discussing, it could be a difference of about €50 a month by buying this year


btw, I'd throw in a first offer of 200k on that place, there's no such thing as a silly offer with the way the market is

tapper

One other couple is not a lot to be viewing a house on a Saturday. In my opinion, if there really were other offers on the house, I don't think they would be calling you, they would just be going with whatever they can get from the interested party. I've shown interest in houses that have offers on them but despite being told that EA would call me to see if I was interested, they never did.
Also, you don't have much pull if you don't have approval. A figure spoken to you by a broker or even a bank is worth nothing these days. Approval shouldn't take long to get and without it most EAs won't take you seriously at all.
Also, pick one absolute max price that your willing to pay for that house. From what you said you haven't picked that price yet and so it's more likely that you'd get carried away later. And always be willing to let it go if it doesn't work out.
I'd take at least 20% off an asking price at the mo (not to say you'd get it for that but it's a good place to start) and if you think it needs fixing up, take the cost of that out of your savings and see what you have left for the purchase after that.

Victor

Most of those house will likely date from 1960-1980 and will at the very least need insulation, re-wiring and re-decoration. It may need re-plumbing, new floor coverings, damp-proofing, etc. Thats €20,000-40,000 of which you will need half on day 1. Ask for the BER cert and have another look in a few weeks, bringing a surveyor along.

Find out what the annual rent of similar properties are. Multiple by 20. That will give you a guide.

zuutroy

Victor wrote: »

Most of those house will likely date from 1960-1980 and will at the very least need insulation, re-wiring and re-decoration. It may need re-plumbing, new floor coverings, damp-proofing, etc. Thats €20,000-40,000 of which you will need half on day 1. Ask for the BER cert and have another look in a few weeks, bringing a surveyor along.

Find out what the annual rent of similar properties are. Multiple by 20. That will give you a guide.

Well it's got good windows and is re-wired and plumbed. All it needs is painting from top to bottom and new doors upstairs, so not too much outlay. If you're going with annual rent x 20 that would be close to 290k!
That is, of course, if you think a 4-bed house will continue to rent for 1200 a month.

Victor

Actual rent, not asking rent. There is scope for taking 10-20% off asking rents.

dan_d

Can you see yourselves living there in 10 years time? (ie, if it does drop into NE and you can't sell)

Will there be enough space in it for you and kids in 10 years time?

Is there enough space in the downstairs rooms that you could have a few people over for food/drinks, without people having to sit on the windowsill or something?

What are the neighbours like? Are a lot of houses rented in the area?

Is there somewhere to park a car (if you have one)?

Is there storage space? Somewhere for the hoover, a hot press for sheets and towels, somewhere to keep coats, outdoor boots, etc?

Does it have an ensuite?(my own hang up - I don't see the point in handing over bundles of money for a 1 bath house, when house with 2/3 baths/toilets, particularly a downstairs one, are available for the same price)

What way does it face? Does any side of it face north? Because this will be a cold part of the house, and if it's an old house, it may then need dry lining etc, in future years, as the north facing part will be quite cold and damp.

When we were house buying, that's how I was thinking. Admittedly, one or 2 of those things are my own hangups, but ya know...! As for the money, 250k seems like quite a good price for that area, to be honest, and if you can get anymore off it that's equally good. Try and put the largest amount of a deposit you can on it, because the less you owe to the bank, the better for you in the long run. I would also advise thinking of holding a little money back to buy the basics in furniture (if you don't already have them), and not to take out loans for furnishings, as some people do.