First-timers who've done their homework can get real value

jetski

The bottoming out of the market has been heralded in recent weeks and falling interest rates mean borrowing has never been cheaper. So is now the time to get off the fence and buy? CLIODHNA O’DONOGHUE finds out
RIGHT NOW there are hundreds of heavily discounted properties out there and never before has price been so negotiable.
First-time buyers are in the best position of all because they have no requirement to sell before buying and, assuming employment, they can obtain financing more easily than many.
This sector of the market was crippled for years by competition from investors who pushed up prices but first-timers are now in an enviable position of power.
They are better educated about the market and have the power to demand price reductions. In the new homes market, they are in a position to negotiate with the developer both on price and on extras, such as fit-out and furniture. They can choose to buy outright, or rent and then buy, under finance schemes being operated in an increasing number of developments.
Just how long this buyers’ market will continue is unclear. However, in the meantime determined negotiators can secure the best value before competition re-enters the market.
Many believe that now is the time to buy, not in 12 months time when the “bargains”, or “gems” have been acquired by faster moving buyers. Others will argue that prices are likely to drop more before stabilising so why pay more now?
But some market observers believe that bargains will be targeted and acquired before the market recovers. The best of the bunch will be snapped up. This does not mean the more tardy buyers will be left with only north-facing gardens or ground floor apartments. But it does indicate that the early bird buyer with their homework done will indeed get the best worms to choose from.
Astute buyers today can also buy without the severity of compromise previously required in terms of location, transport nodes or shops. And it is not all about new homes where developers are easily convinced to drop prices or give an incentive to buyers. For some, all of a sudden living closer to the city becomes an option again because of deep price cuts. Alternatively, a home within budget along the Dart or Luas lines could emerge or an affordable cottage in the Wicklow hills.
There are many well-located vendors out there who must sell for any variety of reasons and cannot afford the luxury of their home remaining on the market. Consequently, prices are being slashed to the bone so that, unexpectedly, an aspiration home can become a reality for discerning buyers.
An increasing number of buyers are now seeking out such opportunities and keep a sharp eye for executor disposals and job relocation sales. They are well prepared for the market and know their business in terms of price per square foot and comparable sale tags, if not prices. They plague agents, spend hours on property websites and scout around on their own, often with property supplements underarm.
They are prepared and eager to do business if the price is right. And they are not ashamed of negotiating; the worse that can happen is that someone says no. Increasingly, buyers believe that prices are set by agents who fully expect haggling and leave a margin for that negotiation. But it is only detailed market knowledge that allows a buyer to negotiate with confidence.
The trick is to get to know your market, rationalise your own requirements and organise finance. The first step is to establish what you can afford because price ultimately dictates the size, shape, condition and location of your home.
Location is the priority so identify the areas suitable in terms of services, transport, schools, shops and commuting times. The structure itself and the aspect of the garden are also paramount so employ the services of a surveyor. Look for later expansion possibilities, such as attic conversions, the creation of a basement or extension to match growing needs.
When it comes to taking on a mortgage, the old rule of thumb is that total outgoings on a property should not exceed one-quarter of total income each year. This measure has been blithely ignored in recent years but economic conditions are now such that financial prudence of this nature is well advised. Ask the bankers which of their products suits you best, depending on the length of mortgage and repayment type. Shop around to get the best rates without penalty clauses – for example, if you pay off your mortgage early.
Financial institutions have seen an increase in the number of first-time mortgages and at the moment are concentrating most of their marketing budgets on this sector. Ronan Sheridan of AIB’s press office confirms that first-time buyer mortgages at the bank have moved from 115 per 1,000 issued to 150 per 1000 issued within the last 12 months.
Study the finances and become au fait with extra costs, such as stamp duty which ranges from zero to 9 per cent depending on the price; solicitor fees which are generally around 1 per cent of the price and mortgage protection policies which also differ depending on the size of the mortgage up to 1 per cent of the value of the loan. But it is good advice to battle for the best possible rates.
Putting together the deposit is also a vital element of property buying. Lenders like to see a history of savings and many first-timers begin by salting away savings into an account, building up the savings to close to whatever the monthly repayment figure on a mortgage might be. This proves the customer’s repayment capability to the lender. Once upon a time buyers had to be saving for two years or more before a mortgage was given and, while this is not the case now, financial houses do look positively on savers.
Preparation is the key, as our case studies establish, and be prepared to bargain seriously. Some buyers haggle about monthly mortgage payments rather than selling price because they say that by doing so they set firm boundaries and force sellers to do all the price adjusting to get the payment down to the level they have set. Experienced sellers will try convincing you that you can afford to pay more but stick to your guns: “I really want to buy this property from you, but I can only afford X payment per month.”
If another bidder appears on the scene, establish if they are indeed buyers and not a ruse to push up prices. Then find out if they have to sell first before they buy because this could mean an unwelcome delay for the harried vendor. Revisit your financial calculations and other options, such as short term loans, to see if you can up the price, assuming another serious buyer.
Cash-rich buyers are king in this market and those with money and without being forced to sell are reaping the benefits in terms of property bargains. But as the market and economy recovers and grows, so too will competitiveness and more bidders. Real value is out there now, so grab it.
This article appears in the print edition of the Irish Times


http://www.irishtimes.com/newspaper/property/2009/0326/1224243437547.html

ntlbell

There's never been a better time to buy

house prices only go er up

the partys back on.

when will they stop with this nonsense.

bangersandmash

jetski wrote: »

The bottoming out of the market has been heralded in recent weeks and falling interest rates mean borrowing has never been cheaper.

Funny the only person I remember blatantly heralding the bottoming out of the market was her own colleague in the property supplement of the same newspaper the previous week.

http://boards.ie/vbulletin/showthread.php?t=2055511075

MANY HAVE hinted at it over the last couple of weeks, but I’m just going to say it: THE PROPERTY MARKET HAS REACHED THE BOTTOM!

The only heralding and hinting seems to be confined to the pages of advertorial supplements.

AARRRGH

It amazes me how they can't understand

a) we were in a property BUBBLE for a number of years
b) we are at the start of a long recession

These two factors can ONLY mean we have years of price decline ahead of us.

If they want to write an article about the benefits of owning a home (e.g. if there is scientific evidence home owners are happier) then that's fine with me, but trying to suggest there is value (and that's value compared to the height of the bubble) out there is just ludicrous.

ionapaul

BEFORE you bought your property jetski, all you did was cut-and-paste bearish articles highlighting that property prices were too high.

SINCE you've purchased, you have changed your tune - can we expect more cut-and-paste bullish articles in the future?

Was it formerly a one-man campaign to drive down the market so you could snap up 'a bargain' and is now another one-man campaign to let us all know that now is the time to buy, prices are about to go up and save yourself for negative equity? Good luck to you if so!

jetski

I had a feeling that article would go against the grain.


My opinion is that if you look long and hard youl can get a nice deal, i did and am happy with that ive a long way to go before im anywhere near negative equity and i don’t think i will. Im not saying were at the bottom of the market, the article is an interesting read that’s all. as ive said in the last few months before any articles were published supporting my argument.... you can in allot of cases get as much off the asking price or more than you might if you wait for the natural decline to take its course and after 3 years of decline on top of that discount, significant savings are being made. FTB's are now getting an extra 5% in TRF. Interest rates are extremely attractive and are going down (mind you if Europe recovers next year as expected they will be going straight back up.).

im not talking the market up, but there are nice pickings to be hadt. many houses are at shocking prices still but its not a black and white argument.

AARRRGH

jetski wrote: »

My opinion is that if you look long and hard youl can get a nice deal

A nice deal compared to what? Prices at the peak of the bubble?

You need to realise it was a property bubble and the prices during that bubble should not be considered normal or rational.

mrgaa1

very interesting article and its true for anyone who can buy and wants to buy they are in the driving seat. There are great bargains out there and we are not far away from the bottom. As credit is hard to get it won't matter how low the house price is dropped - if the prospective buyer can not get a mortgage then the house price is irrelevant. Regardless of anything else we irish love to own our own front door - not renting someone else's. No point in throwing away money in rent - when there are options to purchase. The next six months in this country are going to be very interesting and especially what changes are proposed on April 7. We can't all up sticks and leave because which other hot pan are we going to jump into ? Our own is hot enough but we all need a roof over our heads - so I see a levelling of house prices over the next few months leading to house prices staying more or less the same for 1-2 years before starting to rise. Credit to build large developments will no longer be available in the scale that has happened previous and with new houses costing more to build than ever due to new regulations the sale of second hand houses and existing stock will move.
If we keep on talking ourselves down we will become just that. We need to be more upbeat, look for the positives and then do it. Enda Kenny and his cohorts are talking this way - we can't ignore where we are but we will come out of it and how well we as a nation do all depends on the actions that we take now. And its been very well documented - once the housing market levels out economies start to improve. Together in partnership we need to move forward - the heads need to be removed from the sand and a willingness to move on has to start happening. It took sometime to get into this mess and it will take sometime to get out of it - do we wait for that to happen or do we start doing something about it. Personally doing something about it is the way forward - any other way is simply no good. Unless there are vested interests on this topic who can tell what is going to happen - no-one foresaw what was going to happen to the world economy and no-one will predict when it will get better. We know it will get better - won't it?.

ntlbell

mrgaa1 wrote: »

There are great bargains out there and we are not far away from the bottom.

Great bargains compared to what?

and what are you basing the bottom on, what makes you think a bottom is near?

El Stuntman

ntlbell wrote: »

Great bargains compared to what?

and what are you basing the bottom on, what makes you think a bottom is near?

he can feel it in his gut, a bit like another great cheerleader for the boom :rolleyes:

frankly, ntl I think you should stop talking down our glorious housing market, the men of 1916 did not die so that shoeboxes should cost less than ten times average incomes!

AARRRGH

mrgaa1 wrote: »

There are great bargains out there and we are not far away from the bottom.

Only someone with a vested interest in the property market would make such a stupid statement.

We are far away from the bottom. A basic knowledge of economics is all that is required to know this.

I would bet money you work in the property sector.

bangersandmash

Interesting article from the same author nearly 2 years ago.

http://www.independent.ie/unsorted/property/future-shock--property-crash--the-reaction-44341.html

John FitzGerald (ESRI economist) stated that if he believed there was a crash coming that he would sell his house and rent it back. Tellingly he is not doing so because he believes, as I do, that if (and that is a big 'if') the market is going to crash it will do so in a patchy, selective way which will not impact to any great degree on many of the existing homes in Ireland.

The print media lambasted the 'Future Shock' programme at the time. Unfortunately the programme turned out to be overly optimistic.

jobless

mrgaa1 wrote: »

There are great bargains out there and we are not far away from the bottom.

we've been hearing this for the last 18 months....before that it was the soft landing... are you austin hughes?

mrgaa1 wrote: »

No point in throwing away money in rent - when there are options to purchase.

what about throwing away money on interest on a devalueing asset? is that a good idea?

mrgaa1 wrote: »

If we keep on talking ourselves down we will become just that.

yeah its the talking down that has done this to us, nothing to do with economics

mrgaa1 wrote: »

Unless there are vested interests on this topic who can tell what is going to happen

why would you want to listen to vested interests?...it's these guys who kept telling every one to jump on the ladder

mrgaa1 wrote: »

no-one foresaw what was going to happen to the world economy

they were plenty of people that predicted that their was trouble on the horizon, the scale of that trouble has been unprecidented but to say it was a bolt from the blue is rediculous

mrgaa1

AARRRGH wrote: »

Only someone with a vested interest in the property market would make such a stupid statement.

We are far away from the bottom. A basic knowledge of economics is all that is required to know this.

I would bet money you work in the property sector.

I don't work in the property sector but I call it as I see it. I have been watching the property market for the past 3-4 years because initially lots of people were making loads of money out of it - I never had the courage to take a loan out to buy & sell like others were, thankfully - and then obviously over the past two years the whole thing has fallen over. I've been through the property crash in England when that happened and I saw at first hand how negative everyone was and how much it got people down. I also it rise up and move away from that time and now we can see world-wide the mess we are in. A basic knowledge of economics would tell you to ignore economics - all the worlds economists missed this recession - didn't see it coming. So I think we can safely say that a little bit of knowledge is dangerous and talking about it is even worse.

I believe the bottom is within grasp - within certain areas - because life does move on and people do still get married, divorced, get older and want to live on their own etc... and as people do not want to be wasting money (people are shopping around for bargains - be it consumables, cars, etc....) and therefore they are starting to take advantage of the low cost of borrowing money and as they believe they are in steady jobs they are looking to purchase. Anyone selling at this moment in time will more or less be glad to see someone coming and should listen to offers. So if people want to buy and they want to live in a specific area and want to bargain and want to buy THEN WHY SHOULD THEY NOT DO SO!!!! After all its their money, their lives. I can advise someone to go to Amsterdam for a weekend because I've been there and lived there - I couldn't do that if I hadn't. So why should anyone who is not in the position of others who are looking to do anything tell them to do anything different?

I am making a prediction - just like I select my lotto numbers and want them to come up. I'm probably wrong but I'll make my OWN mind up. I don't - and the country doesn't - need doom and gloom merchants who believe that everything should be free, that it is the right for people to go on strike to look for their wage increases when the country has no money, that those in more or less secure jobs ( so called public servants ) winge etc...
If I'm wrong about my prediction I'll accept it but I believe that current underlying sentiment is why throw my money away in rent when I can buy a house at a price that may suit me - I'm going to be living in the house so instead of throwing away 10k or so a year on rent I'll buy my house and in the future my house will be worth something or indeed it won't matter as I intend to live in it for a long time.

As for the referral made by another poster to the great men of 1916, shame on you - an apology to these great men should be made. They fought for our independence so that we could rule ourselves and make our own future and decisions.

jobless

mrgaa1 wrote: »

I don't work in the property sector but I call it as I see it. I have been watching the property market for the past 3-4 years because initially lots of people were making loads of money out of it - I never had the courage to take a loan out to buy & sell like others were, thankfully - and then obviously over the past two years the whole thing has fallen over. I've been through the property crash in England when that happened and I saw at first hand how negative everyone was and how much it got people down. I also it rise up and move away from that time and now we can see world-wide the mess we are in. A basic knowledge of economics would tell you to ignore economics - all the worlds economists missed this recession - didn't see it coming. So I think we can safely say that a little bit of knowledge is dangerous and talking about it is even worse.

I believe the bottom is within grasp - within certain areas - because life does move on and people do still get married, divorced, get older and want to live on their own etc... and as people do not want to be wasting money (people are shopping around for bargains - be it consumables, cars, etc....) and therefore they are starting to take advantage of the low cost of borrowing money and as they believe they are in steady jobs they are looking to purchase. Anyone selling at this moment in time will more or less be glad to see someone coming and should listen to offers. So if people want to buy and they want to live in a specific area and want to bargain and want to buy THEN WHY SHOULD THEY NOT DO SO!!!! After all its their money, their lives. I can advise someone to go to Amsterdam for a weekend because I've been there and lived there - I couldn't do that if I hadn't. So why should anyone who is not in the position of others who are looking to do anything tell them to do anything different?

I am making a prediction - just like I select my lotto numbers and want them to come up. I'm probably wrong but I'll make my OWN mind up. I don't - and the country doesn't - need doom and gloom merchants who believe that everything should be free, that it is the right for people to go on strike to look for their wage increases when the country has no money, that those in more or less secure jobs ( so called public servants ) winge etc...
If I'm wrong about my prediction I'll accept it but I believe that current underlying sentiment is why throw my money away in rent when I can buy a house at a price that may suit me - I'm going to be living in the house so instead of throwing away 10k or so a year on rent I'll buy my house and in the future my house will be worth something or indeed it won't matter as I intend to live in it for a long time.

As for the referral made by another poster to the great men of 1916, shame on you - an apology to these great men should be made. They fought for our independence so that we could rule ourselves and make our own future and decisions.

sounds like your trying to convince yourself to buy..... but i gaurantee you the person 'who throws away 10k in rent' as you put in the next year will be in a better position than you after you have bought today. The property will easily have gone down by that much in that time....

If you think were near the bottom after 18 months after the having one of the biggest bubbles around the world then your in for a rude awakining. I suggest you read up on the history of housing bubbles and then decide.

El Stuntman

mrgaa1 wrote: »

As for the referral made by another poster to the great men of 1916, shame on you - an apology to these great men should be made. They fought for our independence so that we could rule ourselves and make our own future and decisions.

that was me :pac: and no, I won't be apologising but....I do have a lovely second-hand irony detector for sale, it also works for sarcasm.

100k ono, PM me.

oh and your post makes no sense whatsover, I had to read it twice to confirm this - now I'm sorry I did.

ionapaul

mrgaa1 wrote: »

...all the worlds economists missed this recession - didn't see it coming...

This is wrong wrong WRONG! Economists Nouriel Roubini, Gary Shilling and many more forecast the recession - but were shouted down for years. The bould B. Ahern suggested that such 'doom-mongers' should contemplate suicide; what a hero our former light-fingered Taoiseach was, fighting the good fight for the economic health of the nation!

We must be wary of vested interests, both culpable and not for the madness of recent years, and the ignorant trying to convince us that no-one saw this coming and as such, no-one is to blame. THAT IS A LIE. It is a similar line to: 'now is not the time to go looking for heads to roll' or 'it is too critical a time to think about changing political / economic leadership, we need experienced hands on deck' - lies and more lies from the morally bankrupt golden circle. We need to clear out those responsible...of course there is no calls from the public for this, so Fingleton will get away with his $28m pension and Seanie Fitz will never have to work again, after destroying a bank and billions in wealth.

mrgaa1 wrote: »

As for the referral made by another poster to the great men of 1916, shame on you - an apology to these great men should be made. They fought for our independence so that we could rule ourselves and make our own future and decisions.

The current shower in power, the golden circle of 'old-boys' who run our banks and semi-states, all the vested interests need to apologise to the founders of the state and the current citizens of Ireland for their actions, economic traitors one and all who were and are happy to line their pockets while destroying the economic prospects of the country. None will end up in Mountjoy, none will ever have to work again as they approve each other's golden handshakes.

The situation is worthy of a rant...

El Stuntman

ionapaul wrote: »

The situation is worthy of a rant...

don't get me started, I've sworn off ranting for Lent

ZYX

I think you are missing the point. It is not that all properties have fallen as far as they are going to. It is that some might have.

SoupyNorman

I read this yesterday,

What a patronizing yarn of propaganda, does she believe that she is some kind of soothsayer?

The woman is so used to writing articles on lushes estates with heated indoor pools that I'd be flabbergasted if she even knew what the acronym 'FTB' stood for let alone dictate that it is the ideal time to buy.

To say that, yes there is an abundance of property but you should buy the best 'nuggets' now (even though she admits prices may fall further) or only northfacing properties remain is complete scaremongering.

She probably lives in a clique of race horse owners, property tycoons and developers who've lined her pockets with a new wing on her house to publish such an article.


Just because you write on a golden typewriter does not mean your words are golden missus.

JuliusCaesar

bravestarr082 wrote: »

She probably lives in a clique of race horse owners, property tycoons and developers who've lined her pockets with a new wing on her house to publish such an article.

She works for a newspaper that is heavily dependent on revenue from estate agent advertising.

That's all that needs to be said. They have a vested interest and so you can rely on them for impartial news on houseprices.

johnnyskeleton

There are two parts to this argument, part of which I agree with, another I don't.

Theoretically, there is no good or bad time to buy, it depends on the house, the price and your individual circumstances. Buying now makes perfect sense for people. Furthermore, if you are the only buyer in a land of sellers, then you command the price. Obviously if you could buy a 4 bed redbrick terrace house in a nice area for €100k, that would be a bargain, and it would make sense to buy that. This I agree with.

What I don't agree with is describing what is on sale at the moment as bargains. They're not. Until prices drop to a point at which I am prepared to pay for a property I want, then property is overpriced as far as I can see.

SoupyNorman

JuliusCaesar wrote: »

She works for a newspaper that is heavily dependent on revenue from estate agent advertising.

That's all that needs to be said. They have a vested interest and so you can rely on them for impartial news on houseprices.

Vested interest and impartial dont really partner up well here, the fact that they have a vested interest would suggest that she is leaning more to one side then the other, sugar coating the truth in a patronizing way.

It's like she is trying to balance a wonky pub table with a beer mat on an uneven floor.

Firetrap

Well, I didn't see any journalists coming out to tell us when the market had reached its peak either. So why should we believe them when they tell us it's now the bottom.

martian1980

mrgaa1 wrote: »

I don't work in the property sector but I call it as I see it. I have been watching the property market for the past 3-4 years because initially lots of people were making loads of money out of it - I never had the courage to take a loan out to buy & sell like others were, thankfully - and then obviously over the past two years the whole thing has fallen over.

...

But what about your post on 14/1/09 on the "temporarily suspend stamp duty?" thread?

mrgaa1 wrote: »

the main issue here is perception. I was trying to sell a house yesterday and the guy offered me 125k, then 130 and then 140k. A sure it'll cost you 15k more in interest payments blah blah blah.

sounds like you work in the property sector!

johnnyskeleton

martian1980 wrote: »

...

But what about your post on 14/1/09 on the "temporarily suspend stamp duty?" thread?



sounds like you work in the property sector!

Maybe he was an estate agent in January, but isn't anymore.

oceanclub

Anyone who believes anything a property journalist says is an idiot.

P.