To buy or wait?

tuam_sham

Hi Everyone,

I am currently thinking of buying a house that is for sale in Cregmore which is approx 9 miles from galway city center, 4 miles from new dublin motorway and less than 5 miles from athenry, claregalway and Oranmore. The +'s to this house are. Its a great location for me and my family, close to town but yet has a country feel. Its 10 years old and has been fully updated in the last 2 years. It is 3000sq feet on 1/2 acre and it is in show house condition inside and out. The current owner looks to have spent alot of money replacing bathrooms, kitchen and landscaping gardens. Its very close to the local national school which is handy for our 2 young children. theres a golf club around the corner as well as football pitches.
Its an area we have been looking at for quiet a while and there are rarely houses in the area for sale or at least if there are they are very dated and would require a lot of work.
The -'s are. It has no garage just a small wooden shed but I can always build one down the road or get a bigger wooden shed. I suppose the biggest delima for us and many others out there is should we buy or wait?

I am told the current owner has only lived here for 3 years and is moving abroad hence the sale. They are being very upfront about their bottom price. They paid 476K for it in 2008 which sounds believeable and claim to have spent approx 50K - 60K on renovations since which again looks to be believable based on the homes pristine condition. They are asking for 350K. I am leaning towards making an offer but don't know what's a fair offer. I would really appreciate some opinions!!

jam_mac_jam

Wait, and it doesnt matter what they paid for it and when. It matters to you that it will fall further, and it will.

TwoShedsJackson

What they paid for it and what they have spent on renovating or upgrading it doesn't matter.

A house is worth what someone will pay for it - you need to think about how much your mortgage will be, over how long, and will you be able to repay it if interest rates rise 3%, or if one of you is out of work for a while.

You also need to consider that prices are still dropping, so if you want to make an offer, pitch low, and consider that you will almost certainly have to live there for many years to come.

Houses have generally dropped about 40% since 2007, so you should be starting about 290ish maybe, and if they don't accept that, wait until they will.

noxqs

House prices should drop atleast 2/3rds from the peak, so you're looking at something around:

476 * .3 = 142.8


Use that as a base, and factor in your own valuation of the renovations done and location. Above 200K would be instant negative equity probably. It's not even priced 30% below purchase price which - consulting my graphs here - would be close to peak for Co. Galway. So there's plenty of room for price to drop. It's bad for them, but good for you if you wait.

professore

tuam_sham wrote: »

I am told the current owner has only lived here for 3 years and is moving abroad hence the sale. They are being very upfront about their bottom price. They paid 476K for it in 2008 which sounds believeable and claim to have spent approx 50K - 60K on renovations since which again looks to be believable based on the homes pristine condition. They are asking for 350K. I am leaning towards making an offer but don't know what's a fair offer. I would really appreciate some opinions!!

Why are they selling?

Aprilmay

tuam_sham wrote: »

Hi Everyone,

I am currently thinking of buying a house that is for sale in Cregmore which is approx 9 miles from galway city center, 4 miles from new dublin motorway and less than 5 miles from athenry, claregalway and Oranmore. The +'s to this house are. Its a great location for me and my family, close to town but yet has a country feel. Its 10 years old and has been fully updated in the last 2 years. It is 3000sq feet on 1/2 acre and it is in show house condition inside and out. The current owner looks to have spent alot of money replacing bathrooms, kitchen and landscaping gardens. Its very close to the local national school which is handy for our 2 young children. theres a golf club around the corner as well as football pitches.
Its an area we have been looking at for quiet a while and there are rarely houses in the area for sale or at least if there are they are very dated and would require a lot of work.
The -'s are. It has no garage just a small wooden shed but I can always build one down the road or get a bigger wooden shed. I suppose the biggest delima for us and many others out there is should we buy or wait?

I am told the current owner has only lived here for 3 years and is moving abroad hence the sale. They are being very upfront about their bottom price. They paid 476K for it in 2008 which sounds believeable and claim to have spent approx 50K - 60K on renovations since which again looks to be believable based on the homes pristine condition. They are asking for 350K. I am leaning towards making an offer but don't know what's a fair offer. I would really appreciate some opinions!!

You can wait if you want but you have to weigh up the pros and cons one of the cons can be that someone else could take a fancy to it and then its gone - so if your willing to wait and see but if you really want it and its in your range I personally wouldn't wait if I really wanted it but its the chance you take-Have you tried putting in an offer?
We are in a situation were we are selling here and moving state side and we went out to the US to look at houses which we could put a small deposit (in terms of the Irish market) We decided not to and five (yes five) of the houses we seen are gone. I know the markets are not the same but what I'm saying is if you really what it and you have the budget go for the house you want with an offer instead of settling for something 6 months down the line

Icepick

Wait for a simple reason:
Repossessions to surge as mortgage crisis deepens

ShadowHearth

I know that the house I am aiming for is not even in same league. I checked how much prices droped and now I can afford something.

If you are looking at property as a home and not investment, then you should buy now. If it will drop in price you won't be bothered much as you plan to live there, not to resell it to make a fast few quid. ( that's why all this country went to **** in the first place I guess) .

I applied for mortgage and got approved ( happy as pig in **** ), I want to buy now, I am not looking for investment so I dont care about price ofc my sum is not as big as yours, price drop wont effect me much at all too.

Don't listen how much they spent on house and how much they spent inside. It does not matter at all. Market plummeted and it does not cost as much as he payed. Sellers need reality check. I already viewed one property and the owner was just so much full of **** that it was just sickening... I did not even bothered making an offer. I even found that house add for 5k less then he asking privately... His: no auctioneer means cheaper!

If you know you can repay that mortgage and wont be switcher, you know you love that house too, then why not?

cookiemixer

Hi,
I agree with the last post - if it will be your home, you have the approval and you like it then go for it. Just remember to plan on being there for a long while so make sure it is big enough and meets all of your long term criteria.

Perhaps this isn't the right thread for this question but a few weeks back I read in one of the papers that banks were going to allow peopel to pay thier mortgages twice a month. This apparently reduces the interest a bit. Is there any word if this really is an option and if so with which banks (I'm with Ulster).
Thanks

Jaden

350K for a house in Cregmore? Overvalued by about 50% I'd say. Have a look arounf Headford, Corrondulla, Corofin. There's al awful lot of property out there of the same type as you are looking for that you'd get sub 200K.

There are new (unfinished) houses available for under 100K. Look around.

monkeybutter

aaaagh,

Buy low, sell high, why can't people understand this, unless you really really need to buy (say just has quintuplets, or something similar) do not buy, rent.

Wait untill the market has turned, do not buy on the way down. Only buy on the way up. Does anyone think that when the bottom is hit that there is gonna be a massive jump upwards, it's only then that we can be pretty sure it has bottomed out.

Why not buy on the way down? cause unless you have cash reserves or similar, you will be stuck there, say it drops another 10% (35,000) and you lose your job etc, and could move to say dublin to get another, you won't be able to shift the house unless you can cover the loss.

You may be able to rent it out, but this is taxed income and you probably won't cover the mortage.

Also, you could lose you job in the next 2 years, so wait untill the job situation levels out.

So rent

stargazer 68

Depends on how upset you would be if someone else buys it first really. Think about it - do you really want this house above all others?

ShadowHearth

monkeybutter wrote: »

aaaagh,

Buy low, sell high, why can't people understand this, unless you really really need to buy (say just has quintuplets, or something similar) do not buy, rent.

Wait untill the market has turned, do not buy on the way down. Only buy on the way up. Does anyone think that when the bottom is hit that there is gonna be a massive jump upwards, it's only then that we can be pretty sure it has bottomed out.

Why not buy on the way down? cause unless you have cash reserves or similar, you will be stuck there, say it drops another 10% (35,000) and you lose your job etc, and could move to say dublin to get another, you won't be able to shift the house unless you can cover the loss.

You may be able to rent it out, but this is taxed income and you probably won't cover the mortage.

Also, you could lose you job in the next 2 years, so wait untill the job situation levels out.

So rent

I would not agree with this. Wait wait wait, rent rent rent, by the time you decide to buy, you find out that you are too old and bank wont bother with you.

If you will wait, you cam get in to stage where you will pay someone else's full mortgage.

Problem is not with prices droping much. Problem with real value if the house. In this bubble houses which coated to build 50k eu were sold for 500k eu. Now it's realistic/ish.

I personally would not touch a house for 300k++. unless I have half of it to put in front. ( I doubt anyone has ). Something sub 150ish is more realistic. Even if it drops 20k you wont feel that much of a pinch.

I don't know what will happen tomorrow. Maybe Ireland will sink and be a new atlantida? Maybe we will all evolove in to some rat creatures in next 5 years. I will take my chances now and see how it will work out for me, so far it was not too bad.

Op: make sure this house is not overpriced. For 350k it should be a palace at this climate. Posts above already mentioned that you can find way cheaper property in that region. And whatever you do: don't listen to sellers fairytale stories.

monkeybutter

ShadowHearth wrote: »

I would not agree with this. Wait wait wait, rent rent rent, by the time you decide to buy, you find out that you are too old and bank wont bother with you.

If you will wait, you cam get in to stage where you will pay someone else's full mortgage.

Problem is not with prices droping much. Problem with real value if the house. In this bubble houses which coated to build 50k eu were sold for 500k eu. Now it's realistic/ish.

I personally would not touch a house for 300k++. unless I have half of it to put in front. ( I doubt anyone has ). Something sub 150ish is more realistic. Even if it drops 20k you wont feel that much of a pinch.

I don't know what will happen tomorrow. Maybe Ireland will sink and be a new atlantida? Maybe we will all evolove in to some rat creatures in next 5 years. I will take my chances now and see how it will work out for me, so far it was not too bad.

Op: make sure this house is not overpriced. For 350k it should be a palace at this climate. Posts above already mentioned that you can find way cheaper property in that region. And whatever you do: don't listen to sellers fairytale stories.

As the posters sez they have 2 young children, it's not unfair to assume they are lates 20's earl 30's, so they still have plenty of time in which to wait.

So as you don't know what will happen tomorrow and the outlook at present is for rain (metaphor), I think it's a fair bet to say stay put in case you get wet.

At current rates it's gonna take a hell of a long time to pay off someones mortage with rent, so that argument is flawed in the extreme.

Lets' see at 700 per month for a 3 bedroom house about 10k outside galway (can't necessarily compare like for like, all i can find, but broadly representative) is only about 16,000 over the next 2 years and with repayments running at 1500 a month, renting is the best option.

All you need is for the price of the house to drop a mere 20,000 over the 2 years to cover the whole rent tab, plus you could have saved the extra 16,000 for the deposit (based on the 350,000 repayments), making you a better bet for the bank, especially if the house ends up being in the 120,000 - 150,000 range.

So yes, rent rent rent, wait wait wait, everyone can see that is the best option. You have nothing to lose from this and a lot to possibly gain.

Even if the bank won't give you a 30 year mortage, they have 25 year, 20 year etc, the monthly repayments might be more, but the total cost of the interest is an advantage anyway long term.

You advice to buy now is terrible advice.

ShadowHearth

monkeybutter wrote: »

As the posters sez they have 2 young children, it's not unfair to assume they are lates 20's earl 30's, so they still have plenty of time in which to wait.

So as you don't know what will happen tomorrow and the outlook at present is for rain (metaphor), I think it's a fair bet to say stay put in case you get wet.

At current rates it's gonna take a hell of a long time to pay off someones mortage with rent, so that argument is flawed in the extreme.

Lets' see at 700 per month for a 3 bedroom house about 10k outside galway (can't necessarily compare like for like, all i can find, but broadly representative) is only about 16,000 over the next 2 years and with repayments running at 1500 a month, renting is the best option.

All you need is for the price of the house to drop a mere 20,000 over the 2 years to cover the whole rent tab, plus you could have saved the extra 16,000 for the deposit (based on the 350,000 repayments), making you a better bet for the bank, especially if the house ends up being in the 120,000 - 150,000 range.

So yes, rent rent rent, wait wait wait, everyone can see that is the best option. You have nothing to lose from this and a lot to possibly gain.

Even if the bank won't give you a 30 year mortage, they have 25 year, 20 year etc, the monthly repayments might be more, but the total cost of the interest is an advantage anyway long term.

You advice to buy now is terrible advice.

first of all i said , that i would not buy a house for 350k. You would need huge earnings. if op still plans on buying it for 350k, then i would just rent too. if i won lottery, then i would buy it.

OPs house is overpriced, no matter what sellers says. buying cheaper house to LIVE in, not to INVEST is a good plan.

i got morgage aproved. Its only 80k, and i knew there are a few properties out there in my price range, but i was a bit afraid. i thought i wont find even one property i will like.

i just had my first day of viewing with one auctionier. checked 6 properties, which are lower then my budget and i can move in there now! out 6 properties 4 i really really like and 1 i just LOVE.

i pay rent 650eu per month, now i will pay 390eu per month for mortgage. add life insurances etc and it will be same as paying rent, but only for my OWN place.

If my 75k property will drop MAX 20k. worse case scenario. that will not kill me at all. People have more expencive cars then my house...

Its not advice, its an opinion. Everyone can ignore what i said if they want, but i know for sure: panic button "wait wait wait and pray for the best" does not apply to each situation.

monkeybutter

ShadowHearth wrote: »

first of all i said , that i would not buy a house for 350k. You would need huge earnings. if op still plans on buying it for 350k, then i would just rent too. if i won lottery, then i would buy it.

OPs house is overpriced, no matter what sellers says. buying cheaper house to LIVE in, not to INVEST is a good plan.

i got morgage aproved. Its only 80k, and i knew there are a few properties out there in my price range, but i was a bit afraid. i thought i wont find even one property i will like.

i just had my first day of viewing with one auctionier. checked 6 properties, which are lower then my budget and i can move in there now! out 6 properties 4 i really really like and 1 i just LOVE.

i pay rent 650eu per month, now i will pay 390eu per month for mortgage. add life insurances etc and it will be same as paying rent, but only for my OWN place.

If my 75k property will drop MAX 20k. worse case scenario. that will not kill me at all. People have more expencive cars then my house...

Its not advice, its an opinion. Everyone can ignore what i said if they want, but i know for sure: panic button "wait wait wait and pray for the best" does not apply to each situation.

Where are you paying 650 rent on a 100k property? (assumed on 80k mortage)

D1stant

It very much depends on the type of property I think

If its a city house, old build in a good area, then they are not going to fall by as much as rural one off recent builds (think transport costs in 10 years time, 2 cars, teenage kids etc)

Agree it would have to be a mansion for 350k.

I font agree with the opinion that if its going to be the familly home then falling prices dont matter. Money is money. You dont want to have to pay off an extra 50k of mortgage if you can avoid it

For rural property I would say wait. The penny has not fully dropped with most vendors

Diarmuid

ShadowHearth wrote: »

i pay rent 650eu per month, now i will pay 390eu per month for mortgage. add life insurances etc and it will be same as paying rent, but only for my OWN place.

If I was getting as done over as you on your rent, I'd want to buy too. Your landlord is getting an 8% yield on that rent, Ireland hasn't see those rental yields in *years*

blacktalons

tuam_sham wrote: »

Hi Everyone,

I am currently thinking of buying a house that is for sale in Cregmore which is approx 9 miles from galway city center, 4 miles from new dublin motorway and less than 5 miles from athenry, claregalway and Oranmore. The +'s to this house are. Its a great location for me and my family, close to town but yet has a country feel. Its 10 years old and has been fully updated in the last 2 years. It is 3000sq feet on 1/2 acre and it is in show house condition inside and out. The current owner looks to have spent alot of money replacing bathrooms, kitchen and landscaping gardens. Its very close to the local national school which is handy for our 2 young children. theres a golf club around the corner as well as football pitches.
Its an area we have been looking at for quiet a while and there are rarely houses in the area for sale or at least if there are they are very dated and would require a lot of work.
The -'s are. It has no garage just a small wooden shed but I can always build one down the road or get a bigger wooden shed. I suppose the biggest delima for us and many others out there is should we buy or wait?

I am told the current owner has only lived here for 3 years and is moving abroad hence the sale. They are being very upfront about their bottom price. They paid 476K for it in 2008 which sounds believeable and claim to have spent approx 50K - 60K on renovations since which again looks to be believable based on the homes pristine condition. They are asking for 350K. I am leaning towards making an offer but don't know what's a fair offer. I would really appreciate some opinions!!

who told you this? it dosent matter a flying fuc:K what they paid for it . every month o donnelan/joyce auctioneers galway hold a auction of unsellable houses like the one you are thinking of buying.they sell for 50/60% of what they were bought for.
their auction was packed full a forthnight ago.read last weeks Galway Advertiser for the prices.you would be mental to give that money. did you check out did that area flood with water last winter? for 350K you would get a house in barna/salthill with sea views.near the prom etc. best of luck to you.

Ray Palmer

If you can wait I would wait at this point. Many people who waited already are actually way behind where their peers are. Bare in mind that people have been saying wait for over ten years. That can mean you could easily have been 25 and are now 35 and will probably be 40 before you buy if you wait some more.
Now I know people who waited and they don't have some massive savings to buy a house with. What is kind of more interesting is they own very little such as furniture too. I think it is a mentality thing but people who haven't bought, from my experience, have become quite stalled and haven't somehow cleverly avoided negative equity.

If you can rent in the ideal location or where you plan to live so the kids can keep their friends and the same school. 5 years is a long time in a kids life.

Mr. Loverman

That sounds like an awful lot of money for a property in the middle of nowhere in a bankrupt country where house prices are dropping and show no signs of stabilising or 'recovering'.

Buy if you want but before you do try to make an informed decision. Google 'property bubble' and use politics.ie and thepropertypin.com to learn about the Irish economy. Whatever you do make sure you take personal responsibility for your decision. If you buy for 300k and then realise 4 years later it's only worth 150k, accept responsibility.

If I were you I would continue saving for another few years. Renting doesn't mean you're a failure and it's not dead money.

Mr. Loverman

How much would it cost to rent this property - 1k per month?

That should give you some perspective on what it's worth.

For 350k I would want a lot of land with the property, perhaps 100 acres.

Ray Palmer

Mr. Loverman wrote: »

How much would it cost to rent this property - 1k per month?

That should give you some perspective on what it's worth.

For 350k I would want a lot of land with the property, perhaps 100 acres.

"It is 3000sq feet on 1/2 acre and it is in show house condition inside and out."
In fairness rental value is not a useful gauge on many properties. It is a very large property in the countryside not a standard rental property. A 100 acres outside Galway would be worth quite a bit more than 350k I would have thought but I don't really know the price of agricultural land.

If the finish is particularly good and the property is where they want it may be a very good price.

You are a little over the top on devaluation IMHO. You are effectively suggesting a massive house will be within the reach of a young couple on the average wage within commutable distance to a city. I would say that is unlikely even with the average salary going down.

ricman

most homes have gone down in value by 50 to 60 per cent ,since 2008,350k is too much.
If you want to live in that area ,i,m sure theres lots of houses going for 100k or less.Agricultural land has gone down by 70 per cent plus from its peak value.
You borrow 350k, in practice you,ll end up paying 700k plus to the bank.
whats a nice house 4bed ,big garden going for in the area, see daft.ie .there is no plateau, prices are going down by 12 per cent ,theres no sign of prices stabilising .I,m sure there was overbuilding in galway, nama is going to start selling off houses in 6 months approx.
Or look at houses with half an acre of land.

Mr. Loverman

Ray Palmer wrote: »

You are effectively suggesting a massive house will be within the reach of a young couple on the average wage within commutable distance to a city.

Why should this be available in other countries but not in Ireland?

Why is Ireland different...?

Ray Palmer

ricman wrote: »

most homes have gone down in value by 50 to 60 per cent ,since 2008,350k is too much.

I don't know how you can say that without at least seeing a photo of the place.

ricman wrote: »

If you want to live in that area ,i,m sure theres lots of houses going for 100k or less.Agricultural land has gone down by 70 per cent plus from its peak value.

I'm sure there are cheaper houses how many are 3000sq ft? Why buy a Porsche when you can buy a Fiesta? Same logic, this is a big house

ricman wrote: »

You borrow 350k, in practice you,ll end up paying 700k plus to the bank.
whats a nice house 4bed ,big garden going for in the area, see daft.ie

That's how mortgage work congratulation on understanding but it really doesn't have a point. People don't normally value a house based on how much it will cost them by the end of the term. You also don't know the amount of savings they are actually using to buy the property.

Ray Palmer

Mr. Loverman wrote: »

Why should this be available in other countries but not in Ireland?

Why is Ireland different...?

Because it is not available in other countries either. The house is huge approximately 3+ times the size of an average house. Tell me where an above average house is availbale for the couple on the average wage of that country.

jackiebaron

professore wrote: »

Why are they selling?

They say they're moving abroad but that's bollocks. They're trying to offload this gaff now as they are stuck trying to catch a falling dagger. IF they were rich enough to keep it and it's as beautiful as the OP says, they'd be keeping it as their holiday hideaway in the Irish countryside.

jackiebaron

noxqs wrote: »

House prices should drop atleast 2/3rds from the peak, so you're looking at something around:

476 * .3 = 142.8


Use that as a base, and factor in your own valuation of the renovations done and location. Above 200K would be instant negative equity probably. It's not even priced 30% below purchase price which - consulting my graphs here - would be close to peak for Co. Galway. So there's plenty of room for price to drop. It's bad for them, but good for you if you wait.

So if I wait a little while longer I can take Alison O'Riordan's 545K shoebox off her for 163 grand? :pac:

Idbatterim

So if I wait a little while longer I can take Alison O'Riordan's 545K shoebox off her for 163 grand?

so that would make her 30k car parking space worth about 9k! maybe shell do a good deal if you take both off her hands! then again, she may choose to pitch a tent in the 30k parking space! shed still have the great location, doubt the views will be up to much though! wooops! having reviewed her article, the price for car parking space was a snip at 45k! you could buy a bloody apartment in berlin for that!

Aprilmay

jackiebaron wrote: »

They say they're moving abroad but that's bollocks. They're trying to offload this gaff now as they are stuck trying to catch a falling dagger. IF they were rich enough to keep it and it's as beautiful as the OP says, they'd be keeping it as their holiday hideaway in the Irish countryside.

How do you know that's a lie - We are in a situation where we are moving stateside we have Green cards -we are selling because although we can afford to rent our home here who wants to be stuck paying taxes in two countries I don't - I would still have to pay taxes to the Irish government on my rental while living and paying taxes in the USA - I personally do want to do that, so I think generalising and saying that its a line is a bit unfair to the owner not everyone is in the situation that they are stuck, You don't know how much they may have put down off their home. I'm selling my home for half of what my neighbours have paid for their homes and I'm sure they are wondering how we can afford to sell so low and move abroad with kids but they don't know how much we put down on it or how much we negotiated when buying our home.