First time buyer advice!

tazzzZ

basically as the title says im a first time buyer and have found a house i like. it is a new estate and all houses havent sold as of yet. I am just curious as to roughly what % i should offer below asking price that is reasonable? i can afford the asking price but like everybody if at all possible would like to avoid getting into negative equity especially considering i think this budget is gonna hit everything pretty hard again, house prices included.

Also I know of things like first time buyers grants and interest relief on mortgages but if any1 could inform me of any other grants or "relief" i can get that would be great.

liger

I've read a few things about this before somewhere else, Some say offer 70% of asking price and some say if you dont think the seller will be insulted by your offer then your offer isnt low enough.

You could offer something like 75% and say its a non-negotiable, pre budget take it or leave it offer.

Remeber they can only say no and you can still go back with another offer, if you offer too high you can only pull out of the deal, not lower your offer.

yosser hughes

tazzzZ wrote: »

basically as the title says im a first time buyer and have found a house i like. it is a new estate and all houses havent sold as of yet. I am just curious as to roughly what % i should offer below asking price that is reasonable? i can afford the asking price but like everybody if at all possible would like to avoid getting into negative equity especially considering i think this budget is gonna hit everything pretty hard again, house prices included.

Also I know of things like first time buyers grants and interest relief on mortgages but if any1 could inform me of any other grants or "relief" i can get that would be great.

Then why are you buying now? Instant neg equity is guaranteed.The trajectory of house prices is only going one way.

gurramok

As well as negative equity, beware of living in a ghost estate when you are looking for somewhere to buy.

johndaman66

yosser hughes wrote: »

Then why are you buying now? Instant neg equity is guaranteed.The trajectory of house prices is only going one way.

Was actually thinking the same thing myself. Forthcoming budget may have a serious impact on house prices.

Also regarding offer price its difficult for people to give advise with little or no relavant information to work on. Any specific advice they give could only be described as half baked guess work. Most agree that houses are still overpriced but some are more overpriced than others. I feel it is a bit of a moot point for somebody to say offer 70% of asking price for example. For what we know the houses may be priced well in todays market and may be shifting at a lot closer to asking price. Then again they may not be which is very possible too. I feel ideally you should post details of the house and its location before anyone could attempt advise in this regard. Number of bedrooms, floor area, final specification etc would all be very helpful. Better still a link to the house but would understand if you do not want to do this either.

BingoMingo

gurramok wrote: »

As well as negative equity, beware of living in a ghost estate when you are looking for somewhere to buy.

Agreed - The price is just one consideration. No matter how cheap it is
it is too dear if you are buying into problems with empty houses, unfinished sites etc.,

mathie

yosser hughes wrote: »

Then why are you buying now? Instant neg equity is guaranteed.The trajectory of house prices is only going one way.

Past performance not an idication of future returns etc etc.

People were saying 'house prices always go up' just before the peak.
They'll be saying the opposite in their droves just before the bottom.

Now I'm not saying we're anywhere near the bottom I think we've a few years to go yet but just to play devils advocate.

mrgaa1

gurramok wrote: »

......... beware of living in a ghost estate when you are looking for somewhere to buy.

If there are bargains to be got in these so called ghost estates and if some people are living there and services such as sewerage, storm and street lighting seem to be ok and roads and footpaths are ok then whats the issue?
I fully understand if these so called ghost estates are unfinished in that there are 2 built houses and the others are half-up etc...

gossipgal08

all houses havent sold as of yet


Are the houses finished more to the point. I would not advise buying in an estate that is not finished even if all the houses are sold.

tazzzZ

The houses are not finished as of yet but they are selling well as I have been following the sales of the houses for the past month having been up to the show houses regularly. I am in a good position financially in that I will have roughly 40% of the house price in savings myself and that is if I was to go with the asking price which will never happen. It will be a home I plan to stay in for a very long time it's in a nice area just outside Dublin and would be ideal for a family etc. And I said in the original post I don't want to ever get into negative equity (unlikely as it is with the money I'll put in myself) but obviously in current climate the house is guaranteed to lower in value, I'd just like to feel like I'm gettin the best price I can right now.

Getting back to what I was originally asking with the rough price I should be offering. I was talking with the auctioneer today and got 12,500 in bout 5 mins of negotiations. I walked away saying I couldn't agree to it as I couldn't get a mortgage for that much. He took my number though and said he'd get back to me. Least I'm heading in the right direction with the negotiations etc.

With regard grants etc can any1 tell me what relief and grants are a available to first time buyers other than interest relief and first time buyers grant??

Treehouse72

Buying a house now would be a form of self-harm.

Eglinton

tazzzZ wrote: »

With regard grants etc can any1 tell me what relief and grants are a available to first time buyers other than interest relief and first time buyers grant??

I don't know if you're being sarcastic? You're not living in the last decade now! You'll be lucky to have mortgage interest relief after the budget. Unless you live in Connemara or similar or can maybe get some sort of disability type benefit, there is nothing else.

And frankly I'd have no interest in my taxes subsidising someone buying a house in a private capacity.

gossipgal08

Keep the money and wait a few years. What is now 40% could be 60% in two three years time if not more

Theboinkmaster

tazzzZ wrote: »

The houses are not finished as of yet but they are selling well as I have been following the sales of the houses for the past month having been up to the show houses regularly. I am in a good position financially in that I will have roughly 40% of the house price in savings myself and that is if I was to go with the asking price which will never happen. It will be a home I plan to stay in for a very long time it's in a nice area just outside Dublin and would be ideal for a family etc. And I said in the original post I don't want to ever get into negative equity (unlikely as it is with the money I'll put in myself) but obviously in current climate the house is guaranteed to lower in value, I'd just like to feel like I'm gettin the best price I can right now.

Getting back to what I was originally asking with the rough price I should be offering. I was talking with the auctioneer today and got 12,500 in bout 5 mins of negotiations. I walked away saying I couldn't agree to it as I couldn't get a mortgage for that much. He took my number though and said he'd get back to me. Least I'm heading in the right direction with the negotiations etc.

With regard grants etc can any1 tell me what relief and grants are a available to first time buyers other than interest relief and first time buyers grant??

Everything you've said suggests IMO you should wait to buy. Instead of asking a broad % off asking price you should post a link to the estate and house with all the details and people here can give you their estimate of the true value, and what price the property will bottom out to.

I took this off this forum awhile back, it's not mine but useful - 26 reasons why property will continue to decline in value, there's not one good reason why it could even come close to increasing in the next 3-5 years IMO:

A) Income taxes will rise substantially for everybody
Significant Property taxes will be introduced for owners
C) Significant Indirect tax increases- VAT/Excise
D) Interest relief for investors will be further reduced from current 75%
E) Rent Allowance will be decreased by some material percentage
F) Personal Insolvencies will increase when the law is changed in their favour
G) Continued downward wage pressures-or no pay increases at least till 2013
H) As competition in Banking is reduced then mortgage margins will rise
I) Emigration will continue by current and future potential homeowners
J) NAMA releasing finished properties onto the market mopping up demand
K) ECB raising interest rates to normal levels, ie by 1.5%-2.5%
L) Property owners/investors in tight financial straits will be forced to sell
M) People realise that property in Ireland is still expensive vs other countries
N) More builders are put into receivership and properties are sold at large discounts to current prices as has happened recently where €120k properties had queues wanting to buy them (North west region I think)
O) Rising fuel prices decrease disposable income and discourage commuting
P) The Croke Park aggreement falls apart and public sector pay falls
Q) Unemployment rises and
R) The 12.5% Corporate tax rate rises and ECB/IMF step in when the government falls after the 3 byelections and Bonds become too expensive for Ireland to issue.
T) Deflation or very low inflation causes debt to have to be repaid in full rather than inflated away at lenders expense.
U) Stiffer regulation forces banks to provide mortgages with more caution
V) Interbank lending to Irish Banks does not return to precrisis levels and the Banks have to price margins very conservatively-A given
W) Building costs decline further as NERA is disbanded and new build houses can be profitably sold for less.
X) Development land has plummeted so land costs can lead to further downward pressure on prices of future developments.
Y) Commercial rents continue to decline and contagion negative pressures apply to residential rents leading to lower property asking prices
Z) Contrarily the current booming birth rate will provide demand in 25 years time-for subsidised housing at the least

IMO we're only half way through our property crash - a lot more to come

Theboinkmaster

simplesimon wrote: »

You should factor in any further price drops into your bid. Most property analysts believe there is another 15% to drop. If you're buying from a developer then put in a cheeky offer and use the fact that they are desperate for a sale.

People underestimate the benefits of buy property, such as paying down the interest before further interest rises (futures markets believe they will rise 2% in the next few years) and the benefits of mortgage interest tax relief, which is starting to be phased out next year.

If you're unsure Derek Brawn, who wrote the book Ireland's House Party, has devised a calculator for first-time-buyers to assess the cost of buying now and what price they should pay and what it will cost if people wait. It's www.comparebuy2rent.ie

You have to be realistic, there will be further drops and house prices could bounce along the bottom for the next ten years before recovering, but by then you'll have paid off a ten years of interest and capital, whilst benefitting from 7 years of mortgage interest relief.

Utter nonsense.

Where did you get this 15% you plucked from the air?

Assuming morgage interest relief for the next 7 years would be stupid given the upcoming budget and times we're in - most likely to be abolished completely.

Also that calculator you linked is a pile of sh!te

Atodds

I can't see them getting rid of the mortgage interest relief , not this budget anyway. The saving they would make would be too small compared to the damage it would do to an industry already on it's knees. More likely they will leave it alone and hit us with a property tax instead . Typical they give with one hand and take with the other.

Theboinkmaster

Atodds wrote: »

I read his book , smart guy. Is the site any good ?

Reported for advertising.

JoeyJJ

Also beware there is a 5 euro odd monthly fee to access his site. Don't think you'll get too many signing up for that. Google ads might have been a better revenue for you.

Zamboni

Yeah I think there is a free one Ronan Lyons did somewhere.