First time buyers general advice/queries..

Ninja_Go

We are in the process of applying for a mortgage and am wondering generally are there any tips we should know about to help us when buying?

- if we register interest with an EA might they alert us to houses coming to market before advertising publicly?

- are all houses underpriced to attract interest? Our budget is tight enough for the area we're looking at so should I be looking at houses well under budget to allow for bidding wars?

- We've been told by one bank we should get AIP pretty quickly but a couple of factors will delay drawdown of funds (clarity around our employment contracts etc); should we wait until these factors are no longer issues before bothering to make offers? Or is the drawdown of funds a standard issue that delays the selling process? Any examples people can share?

Sorry if this post is somewhat vague/ reeking of naivety, we are just totally clueless about the process.

Thanks in advance

1641

Re Q1 Most likely not. Depending on where you are looking there are probably loads registered with Estate Agent, who will be aiming to get a price war going. The more who know about it the better for this.

Q2 Some agents tend to low price as a strategy to get as many interested as possible (see price war above). Some others will price a bit high (often to flatter the vendors and persuade them to choose this Estate Agent rather than a more prudent competitor). Many will aim to get it as about right as possible, and believe this is the best strategy. In the end, of course, the market decides so they may get it wrong. An exception to all this relates to auctions (as opposed to private treaty sales). I would say that more often than not in auctions the AMV advertised is an underestimate (and sometimes considerably so).

I can't give any opinion on Q3.

Thats my tuppence worth.

awec

If you're buying a new build the price is the price, no bidding involved, so you should look at houses within your budget or below, no need to go well below your budget.

Ninja_Go

1641 wrote: »

Re Q1 Most likely not. Depending on where you are looking there are probably loads registered with Estate Agent, who will be aiming to get a price war going. The more who know about it the better for this.

Q2 Some agents tend to low price as a strategy to get as many interested as possible (see price war above). Some others will price a bit high (often to flatter the vendors and persuade them to choose this Estate Agent rather than a more prudent competitor). Many will aim to get it as about right as possible, and believe this is the best strategy. In the end, of course, the market decides so they may get it wrong. An exception to all this relates to auctions (as opposed to private treaty sales). I would say that more often than not in auctions the AMV advertised is an underestimate (and sometimes considerably so).

I can't give any opinion on Q3.

Thats my tuppence worth.

Thanks very much, really appreciate the response

Lux23

awec wrote: »

If you're buying a new build the price is the price, no bidding involved, so you should look at houses within your budget or below, no need to go well below your budget.

Is that true? Do people not offer more to get a new build? No wonder people queue up for days.

Ninja_Go

awec wrote: »

If you're buying a new build the price is the price, no bidding involved, so you should look at houses within your budget or below, no need to go well below your budget.

No new builds whatsoever in the areas we can afford, close by the new builds are 20,000+ over budget. Thanks for the reply.

awec

Lux23 wrote: »

Is that true? Do people not offer more to get a new build? No wonder people queue up for days.

First come, first served (unless you know the developer), pick your house and pay the deposit there and then.

CPSW

I am in the process of hunting at the moment and we have made our first bid.  One bit of advice is to set your budget once you get approved and stick to it.  For example if you are approved for 300k, you should look at houses around 250k.  As expected I am finding bidding wars are getting out of hand!  Best of luck to you.

LirW

- We've been told by one bank we should get AIP pretty quickly but a couple of factors will delay drawdown of funds (clarity around our employment contracts etc); should we wait until these factors are no longer issues before bothering to make offers? Or is the drawdown of funds a standard issue that delays the selling process? Any examples people can share?

It depends on what these factors are and how long it takes to get some clarity. You have to show the proof of funds pretty early on if you're buying in an urban area, rural EAs are often more laid back about it but prepare that nobody takes your bids seriously without AIP.
If the bank gives you AIP and you go Sale agreed on a house, it realistically takes you at least 8 weeks but most of the time a lot longer than that to close the sale (8 weeks to 12 months).
Best thing is talk to your bank/broker about this, they can answer that quick enough.

Ninja_Go

CPSW wrote: »

I am in the process of hunting at the moment and we have made our first bid.  One bit of advice is to set your budget once you get approved and stick to it.  For example if you are approved for 300k, you should look at houses around 250k.  As expected I am finding bidding wars are getting out of hand!  Best of luck to you.

OK thanks...that's pretty significant advice as we are approved for €220,000 plus deposit our absolute max will be €245,000, so we will need to look at €200,000 mark I suppose? That's disheartening but good to know

Ninja_Go

LirW wrote: »

It depends on what these factors are and how long it takes to get some clarity. You have to show the proof of funds pretty early on if you're buying in an urban area, rural EAs are often more laid back about it but prepare that nobody takes your bids seriously without AIP.
If the bank gives you AIP and you go Sale agreed on a house, it realistically takes you at least 8 weeks but most of the time a lot longer than that to close the sale (8 weeks to 12 months).
Best thing is talk to your bank/broker about this, they can answer that quick enough.

We'll be buying in Dublin. I'm entering a third successive contract in September so they want to see that contract which I won't receive until then; my husband is over halfway through a probation period which ends mid October so they have said that funds can't be drawn down until that probation ends. Otherwise it seems everything else is in order and one bank said they can give AIP while waiting on these conditions. Therefore if we got AIP say at the beginning of September could we be ok to make offers? With drawdown pending mid October...?

LirW

Yes you can offer, because if you find something in September, the change that the drawdown will be in October is next to zero.

Happy house hunting!

Ninja_Go

LirW wrote: »

Yes you can offer, because if you find something in September, the change that the drawdown will be in October is next to zero.

Happy house hunting!

Thanks so much for the response..can you just clarify what do you mean by "the change that the drawdown will be"

If we get AIP of an amount this is valid for 6 months so what will change? Thanks

LirW

Sorry, I meant chance. Once you are sale agreed the whole process takes a few weeks to months until the drawdown. Your bank and solicitor will guide you through the whole process. Ask them as many questions as you want, that's what they're there for.

Ninja_Go

LirW wrote: »

Sorry, I meant chance. Once you are sale agreed the whole process takes a few weeks to months until the drawdown. Your bank and solicitor will guide you through the whole process. Ask them as many questions as you want, that's what they're there for.

OK great to know, thanks!

c6ysaphjvqw41k

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1641

awec wrote: »

First come, first served (unless you know the developer), pick your house and pay the deposit there and then.

Would you need to be also factoring in the cost of VAT when paying a deposit on a new build ?

awec

Walker Scary Barracuda wrote: »

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1641 wrote: »

Would you need to be also factoring in the cost of VAT when paying a deposit on a new build ?

It's not the full deposit amount, it's a booking deposit that's a fixed amount. 5-10k as you say.

You can pay by bank transfer, I doubt they accept cash.

morrga

Ninja_Go wrote: »

OK thanks...that's pretty significant advice as we are approved for €220,000 plus deposit our absolute max will be €245,000, so we will need to look at €200,000 mark I suppose? That's disheartening but good to know

If you have €245,000 to spend then look at houses up to 235-240. You don't have to drop to 200k. Also if you buy a new home for 240, Revenue will give you €12,000 of a tax refund thus your capable of buying a house in the 250 mark.

Ninja_Go

morrga wrote: »

If you have €245,000 to spend then look at houses up to 235-240. You don't have to drop to 200k. Also if you buy a new home for 240, Revenue will give you €12,000 of a tax refund thus your capable of buying a house in the 250 mark.

Whoa wait where is that tax refund coming from?! Why have none of the banks mentioned that?

I was basing the drop in price range on a comment made by someone else that prices are often advertised well below price to attract interest leadingto a bidding war/inflated price.

By looking at houses priced €240000 we don't have much room for manoeuvre making bids..

c6ysaphjvqw41k

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Ninja_Go

Walker Scary Barracuda wrote: »

The first time buyers grant? Its through Revenue not the bank. Also there's talk of them scrapping it in the next budget.

Therein lies my naivety, no knowledge of this whatsoever! Bank mentioned Help to Buy scheme but not this..Jesus that'd be a major help. . Is that in the form of tax credits? Or is is it a direct refund? Does it come through at the end of the year?

c6ysaphjvqw41k

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1641

morrga wrote: »

Also if you buy a new home for 240, Revenue will give you €12,000 of a tax refund

I thought the OP was looking to buy a second hand house, not new ?

morrga

Ninja_Go wrote: »

Whoa wait where is that tax refund coming from?! Why have none of the banks mentioned that?

I was basing the drop in price range on a comment made by someone else that prices are often advertised well below price to attract interest leadingto a bidding war/inflated price.

By looking at houses priced €240000 we don't have much room for manoeuvre making bids..

To be realistic I think the bidding wars are happening on houses from 350-450 range. Houses in and around the 240 mark wouldn't have the same appeal in terms of location and or build so shouldn't attract the same sort of frenzied bidding. Obviously that is a perception so open to correction.

morrga

1641 wrote: »

I thought the OP was looking to buy a second hand house, not new ?

Correct. I was suggesting a redirection to new homes to help add an extra 12k to the budget. Plus no one should ever turn down money from the tax man if at all possible

Alf Veedersane

Ninja_Go wrote: »

OK thanks...that's pretty significant advice as we are approved for €220,000 plus deposit our absolute max will be €245,000, so we will need to look at €200,000 mark I suppose? That's disheartening but good to know

Knowing how much you're able to pay is one thing but just be aware of what that will be in repayments as well just to have an idea of where repayments are versus rent. It might impact on how much you actually want to spend.

CPSW

Ninja_Go wrote: »

CPSW wrote: »

I am in the process of hunting at the moment and we have made our first bid.  One bit of advice is to set your budget once you get approved and stick to it.  For example if you are approved for 300k, you should look at houses around 250k.  As expected I am finding bidding wars are getting out of hand!  Best of luck to you.

OK thanks...that's pretty significant advice as we are approved for €220,000 plus deposit our absolute max will be €245,000, so we will need to look at €200,000 mark I suppose? That's disheartening but good to know

I know it sucks but we got the same advice, the house we are bidding on has gone up over 20 grand in 4 days with the bidding parties involved.  I knew it was tough going out there but not that crazy that quick!

Ninja_Go

morrga wrote: »

Correct. I was suggesting a redirection to new homes to help add an extra 12k to the budget. Plus no one should ever turn down money from the tax man if at all possible

Ah sorry I didn't see that you mentioned new homes in your original post, we won't be able to afford a new build anywhere near the area we are looking at, they're all significantly over budget but thanks for the suggestion.

Ninja_Go

CPSW wrote: »

I know it sucks but we got the same advice, the house we are bidding on has gone up over 20 grand in 4 days with the bidding parties involved.  I knew it was tough going out there but not that crazy that quick!

Wow! That's scary stuff!

Ninja_Go

Alf Veedersane wrote: »

Knowing how much you're able to pay is one thing but just be aware of what that will be in repayments as well just to have an idea of where repayments are versus rent. It might impact on how much you actually want to spend.

Repayment wise we are fine our absolute limit is €245,000 based on a mortgage of €220,500