Building Costs vs. Subsequent House Valuation

redsheeps · 11-07-2022 10:13am #1

Curious if anyone has gone the route of building a house in the past 2-3 years (ideally in the past 6 months) who also had their house valued subsequent to the build being completed?

Looking at a self-build of €400,000 with a site that was €50,000. We hoped to avail of the HTB scheme, however the rules are that it is not the building cost of the house that determines whether you fall under the €500,000 threshold and is instead the valuation of the property after it's built. We had no intention of getting near €400,000 originally but price of materials and cost per m2 at the moment has pushed the cost of the build way up.

I'm wondering is there typically much difference between the building costs + site cost and the valuations people subsequently get for their built property? I'm thinking that it's very possible that our build will be valued above €500,000 if it costs us €400,000 for the house to be built and €50,000 for the site.

The house will be approx 190m2.

Faiche Ro · 11-07-2022 1:15pm

https://www.boards.ie/discussion/2058253958/building-costs-vs-subsequent-house-valuation

If you look on daft at houses for sale in the area of a similar size and gauge what they are going for. And then add a bit extra for A rated, new etc. And you should be in that ball park. (Thats effectively what the local auctioneer will do when the bank asks for a valuation for the mortgage)

We built about 3 years ago and at the time it was unlikely that the final value would be higher than the cost of building plus the site. (it typically costs more to build than it would to buy by the time you have everything factored in)

sweet spot for the HTB is over 400K under 500K

SodiumCooled · 11-07-2022 2:09pm

The auctioneer should work with you a bit on it too, I know when we were getting site plus estimated finished valuation (by the bank appointed valuer) prior to letter of offer being issued he was asking for our own thoughts on the type of figures we were hoping for and also asked for the build cost to make sure he valued a decent bit above. I got the feeling that if I wanted an extra 20 or 30k up or down he would have accommodated.

briangriffin · 12-07-2022 10:49pm

https://www.boards.ie/discussion/2058253958/building-costs-vs-subsequent-house-valuation

Please be very careful about what you get as your valuation from the bank. You are after getting the wrong information about the help to buy ( in my experience at least and I have just built and received my help to buy)

Your help to buy is determined by the mortgage amount you take out as a percentage of the valuation of your house.

The valuation of your house happens BEFORE your house has been built. You get this as you apply for your mortgage. This is a figure your approved valuer comes up with. It is as someone said above based on comparable properties for sale in your area usually 3. This valuation is a made up figure as is the site value. If your house is 190sqm it should not be above 500k. It's then dependent on over 70% of your mortgage value so make sure your sums add up.

You most definitely should talk to you valuer and give him a figure. The HTB is tax you have paid to the government and its not often you get a chance to get it back. Make sure you get it 30k will be badly needed by the time you are finished.

redsheeps · 13-07-2022 10:16am

https://www.boards.ie/discussion/comment/119329321#Comment_119329321

Thanks so much for that info. I have found slightly differing comments on the HTB with building so great to get that from someone who has gone through it. Didn't know it was based on the valuation before the house is built!

Using say a house valued at €450,000 before it's built, my understanding was that we had to have a mortgage of at least €315,000 as this is 70% of €450,000, and if we took out a mortgage of €314,999 we would not get the HTB.

briangriffin · 13-07-2022 11:11am

https://www.boards.ie/discussion/comment/119330373#Comment_119330373

No problem, it's a minefield of information. I can explain our process so the valuation has to be under 500k and the mortgage has to be a minimum of 70%. We applied for our mortgage and the valuation was based on 3 comparable properties in the area let's say they were 4 bed houses valued at €450k as in your example. Your example is then 100% right we needed to take out a minimum of €315k to qualify for the HTB and we applied for the HTB as soon as we had our first drawdown received, you will need to send the valuation from your bank to revenue. Have your mortgage amount and your valuation clear in your head before you speak to the valuer. Pm if you like. As soon as you have your first draw down your HTB can be drawn down and will land in your account before your last draw down...

eusap · 14-07-2022 2:13pm

Also be careful with a valuation in case it causes issues with your mortgage, if the EA undervalues will it cause an issue from bank with mortgage valuation

Building Costs vs. Subsequent House Valuation

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