It’s a buyer’s market – ifyou have the money. (Big if.)
If you have sold a property or have cash in hand, fantastic. If you’re sure of getting a mortgage, also fantastic. But if you’re selling to buy, make that sale your priority. Appoint an estate agent who will tell you honestly what you can expect to make and how long it’s likely to take.
Not to take all the fun out of buying – it’s just important to know what you have to spend before you go looking.
Caveat emptor – Buyer beware
The good news is, it is a buyer’s market price-wise. There are real bargains to be found. But in certain desirable locations there are not enough properties on the market. Everybody’s still waiting to see.
So your search is not all about choice but focus. Define what you’re looking for and be ready to pounce when something comes up. (Our Search andAlerts register helps you do that.)
Search and research
Ask family and friends about estate agents and solicitors.
Walk around the locations you’re interested in as well as the properties.
Check what it’s like by night and day. (See our Buyers Guide)
At OMD we recommend viewing by appointment only. We try to suit your timetable and always conduct the viewing ourselves so we can answer all your questions about the area, the property and the price. Make sure you give yourself enough time to take it all in and make comparisons. Sometimes people lose out because they make snap judgements.
Don’t write off properties that may need some work done – it’s cheaper now with tradespeople available and sales everywhere. You’ll be improving your investment and even doing your bit for economic recovery!
Do the footwork on finance.
Right now it can be very difficult to get a mortgage but not impossible. We can advise on how to go about it. Again it’s vital to be organised and prepared. Lenders are not fighting over any and every potential customer anymore. But they are looking for safe prospects. We can help you put together a good case for your mortgage.
How to lose your heart not your head.
· Before you pay your deposit be sure your Estate Agent is fully licensed.
· Employ a competent solicitor to handle transaction. Cheapest is not always best.
· Do your research before you buy. It is very much caveat emptor (Latin for buyer beware) when purchasing property.
· Speak to your lender first, make sure you have approval in principle before you decide on an offer and remember this is only good for 3 months at which point you will have to apply for a new AIP.
· If you are selling your home in order to buy, make sure you appoint the best agent to sell your home in advance of making offers on property.
· Get informed; speak to friends and family members who have been through the process in recent years.
· Be sure a BER number is advertised with rating.
· Talk to a mortgage broker for independent advice on where to apply and how much you can afford to borrow.
The Buyer’s Guide
1. First, the finances
It’s a buyer’s market, but finding a mortgage is today’s big challenge. Talk to OMD for advice on how much you may realistically borrow and where to ask. We can recommend an independent mortgage broker if needs be. When you’ve found the best deal for you, get Approval in Principle as soon as possible – so you’re ready to make an offer when you see the home you want.
2. Let the search begin
Register with a qualified estate agent like OMD and we will Alert you to any property that matches your criteria. Narrow your search by location if possible – think transport to jobs and schools, shops and local amenities, walk around, see what the area is like by day or night as well as at weekends. Then checklist as many properties as you can find with the features you prefer.
3. The offer
You’ve seen the home you want – probably three times – and it’s within your budget. Now you – or we – can make your offer to the seller. Most likely there will be some negotiation to be done – that’s our main talent by the way. It’s not legally binding at this stage – so you can opt out if you change your mind.
4. Now get legal
If the sale is going ahead, the seller’s solicitor gets busy on a contract.
You now need a solicitor to study the contract, check the title deeds and so on before processing the sale (conveyance). Don’t forget the legal fees as part of your funding.
5. The deposit
You now pay a booking deposit (often 5% of the price) which is still refundable until the contract is signed.
6. Sale agreed
When your offer is accepted, written confirmation is confirmed between you and your agent and solicitor and the seller’s. The document specifies the agreed price, conditions of sale, closing date and contact details.
Your mortgage provider needs proof that the property is in order and worth the price you are paying. You or your lender appoints a surveyor.
8. Show them the money
A letter confirming the mortgage offer is needed before contracts are signed. All conditions of sale are agreed.
9. Sign the contract
Your solicitor ensures that everything is present and correct in the contract and the title, and invites you to sign. This legally binding contract is then signed by the seller, a completion date is agreed when the keys are handed over and you move in.
10. How long does it take?
It depends on the needs of the buyer and seller, or sometimes on legal requirements. It can be as little as a week after signing the contract,
What exactly is a mortgage?
A mortgage is a long-term loan from a bank or building society to enable you to buy a home. Normally you pay it back by monthly payments over a period of 20 to 25 or even 35 years. The property itself is usually held as the security for the loan. The amount you can borrow is usually based on your income and may be up to 80% of the value of the property.
How do I get a mortgage?
Because of the recession, it is far more difficult now to qualify for a mortgage.
It all depends on whether your job or source of income is stable, how much you’ve been able to save and other factors. At OMD, once we know your situation we can advise you on where and how to apply.
What happens if I can’t meet the repayments?
As you probably know, many Irish people are now in this situation. But you are unlikely to get a mortgage these days if you are at risk. Lenders also insist on Mortgage Protection- an insurance policy that covers your repayments if you fall ill or are made redundant. So don’t be too pessimistic. Property prices are now at a realistic level.
What about the dreaded negative equity?
This is the problem faced by homeowners who bought at the height of the Celtic Tiger market. They borrowed far more than their properties are now worth and still have to repay it, even if forced to sell at a far lower price than they paid. The value of the property, its equity, is negative.
If they are not forced to sell, it is less of a problem.
The market crashed in Ireland, but it will rise again when the economy improves. Prices are now realistic and it is actually a good time to buy.
Is there mortgage interest relief?
Unfortunately, mortgage interest relief does not apply to mortgages taken out after 31 December 2012.
Do I still have to pay Stamp Duty?
Yes. It is a Government Tax and since 2010, it applies to all properties and buyers. It is based on the value of the property.
Up to I million euro: 1%
Over 1 million euro: 2%
The duty is paid to the Revenue Commissioners who then stamp the property deeds. Without the stamp, the deeds cannot be registered.
Are there many other costs?
A few. Before you draw down the mortgage, you need to allow for:
Thebooking deposit which is refundable if the sale doesn’t go ahead.
Legal fees and estate agents fees: may be a flat fee or a percentage of the price.
Survey: normally in the region of 150-200 euro to ensure the property is safe to buy.
Home Insuranceis another important consideration. It is usually one policy
(sometimes two) covering the building and its immovable fittings such as bathroom or kitchen, and the contents which means anything moveable like carpets, electrical equipment and so on which might be damaged or stolen.
Maintenance or Service charges: if there is a management company involved in the maintenance of communal areas in apartment blocks or housing developments, there will be an annual charge.