Bad idea too buy now??

wildflower

Hi, I am looking for a bit of advice about buying a house. A neighbour wants to sell their house. its in rural area with 4 acres land and 3 sheds and awaiting planning for a large 3000sq ft bungalow on 1 acre, house is 20 odd yrs old and dated but well maintained. He has it up online for 350k- LUNACY!- bad auctioneer i think as he is looking for a quick sale. He came to us as he knows we are in a position to be looking for a hse soon- he mentioned selling around 250k which we thought was a bit high but told we wud consider.
however since then i have been researching a bit more and with the way that houseprices are freefalling is it LUNACY to buy now! Houses in limerick seem to be the slowest in the country to fall- why i dont know.
we have been verbally approved a mortgage up to 300k but we want to get a max mortgage of 200k. at the boom this particular hse would have been valued at 400k+ but i wouldnt use that as a great indicator of its actual value now.
what i want to know- will we be in negative equity in a cpl of yrs if we did buy at say 180k- which i think might be reasonable now. we are first time buyers so we wud lose mortgage interest relief after this dec but thats only 12k- if hse drops 30% in value from 180k???
we would like to buy from this man as he needs it and we need a hse- we are currently renting with a toddler (but rent just 300pm) and would love a hse but i dont want to make an emotional decision on soemthing as huge as this! any advice- good or bad really appreciated!

RXMPS

300 a month rent:eek:

Why do you want to buy?:)

You would be crazy imo, keep saving and wait till the waters clear.

Limerick county is in a right mess, no jobs, no prospects, prices will drop there as well.

Hold out a few years yet.

wildflower

ya i know 300 a mth is unreal- we know landlord v well and hes happy to rent knowing we mind the place and we do all maintenance. but we hate it. we are both from country and this is not how we saw our lives, the regeneration in limerick has ruined our estate, our house used to be so nice and we were looking forward to having our baby and chilling until the market calmed down a bit but we live in terraced hse wit scumbags rehoused for free by council on either side- its seriously depressing everyday!
we would love a place of our own with lots of space and in the country- better schools, better way of life. i would pay a bit extra for knowing im gettin that for my family with the option to build a huge hse when we want. however will we ever b able to afford to build- is the site wit plannin a write off cos of cost of buliding? we dont want/need the other 2 acres- but maybe sell em or something. and will the price of property worth 400k drop much more than 180k ? also will we b able to build 3000sq ft bungalow for 150k direct labour in the next cpl yrs?- is it even possible wit rising costs of materials and fuel?

okiss

At the moment you are just paying €300 a month rent even though the house is not in a great area. I would stay where you are for the next 12 to 18 months. In that time the house prices will fall further and you will have more money saved. Also the household tax cost should be clearer at that stage. You could buy a big house in the country now and find yourself making large payments for water, household tax ect.
You need to decide do you want to buy a house in the country/ do you want to build a house in the country or do you buy a home in the city or near the city in a better area?
You won't be able to build a 3000 sq ft house by direct labour in county for €150k. I know a few couples who built houses by direct labour and they all cost more than this for a smaller houses.

mrsWhippy

Why don't you just rent something in the countryside? you'll get value for money renting outside the city for sure!

mmc2010

To be fair, I think getting a house, 3 sheds, 4 acres, one of which has full planning(once it gets it!) for €180k is a steal! Don't know the size of the house but if its lets say 1500sqft. The house is in good nick - the minimum it could be worth would be approx €100k and that's buying it at below cost. An acre site with fpp is worth probably €50-60k (again with the usual market dependencies) and you've still got three acres. Agricultural land is making alot of money at present and would probably make €10k an acre. I think, depending on what you intend to do with it, it is good value to me!

djimi

mmc2010 wrote: »

To be fair, I think getting a house, 3 sheds, 4 acres, one of which has full planning(once it gets it!) for €180k is a steal! Don't know the size of the house but if its lets say 1500sqft. The house is in good nick - the minimum it could be worth would be approx €100k and that's buying it at below cost. An acre site with fpp is worth probably €50-60k (again with the usual market dependencies) and you've still got three acres. Agricultural land is making alot of money at present and would probably make €10k an acre. I think, depending on what you intend to do with it, it is good value to me!

Depends on what you want to do with it I suppose. Unless they are planning to build on the site themselves I would be inclined to try and get the seller to sell them just the house and a portion of the land (say 1 acre) and let him sell the land with planning permission as a seperate plot entirely.

I have to say though that from reading the OP is sounds like you just want to move out of where you are and into your own house, and this one just happened to be offered to you. That being the case I would seriously consider why you are picking this house over the countless others out there, and why you want to buy now rather than waiting for a year or even two years until the prices drop further? If you dont like where you are now then rent until you move; I dont know what the mortgage repayments would be on what you were offered but surely you could find a rented accomodation for similar money?

And saying things like "we would like to buy from this man as he needs it and we need a hse" suggest to me that you are looking to buy this house for entirely the wrong reasons. Sentiment doesnt come into this; you are making one of the biggest decisions of your life and it should be absolutely right for you and you alone. If you think it makes financial sense and you are happy with it then by all means, but only come to that decision having looked at plenty of other properties in the meantime, sitting down and doing all the sums, and also speak to people to get a feel for where houseprices may go in the area. Given the rate of depreciation of house prices at the moment you may well end up better off to rent and buy next year than to buy now.

Man007

That sounds good value to me.

Maybe you will get a house cheaper in a few years but who knows its really just guess work.

I think there's more to consider than just money you are clearly not happy where you are living and think of your children mixing with scumbags as you called them.

You can't put a value on happiness I say if you can afford it go for it.

djimi

Man007 wrote: »

I think there's more to consider than just money you are clearly not happy where you are living and think of your children mixing with scumbags as you called them.

You can't put a value on happiness I say if you can afford it go for it.

Equally you shouldnt rush out and spend €200k on a house just because it presents you with the opportunity to get out of your current living situation. Theres always the option to rent another accomodation until somewhere better comes along.

the_syco

wildflower wrote: »

wit scumbags rehoused for free by council on either side- its seriously depressing everyday!

Realise that once you buy the house, scumbags could get the house next to you, and you wouldn't be able to leave to easily.

wildflower

we have been looking at rents in the counrty and they are crazy- at least 800 for anywhere half decent- auctioneer told me rents were going up instead of down- wtf!!!
so scrap that idea cause we are crazy trying to save and cant waste 500e a mth now.
so its either buy or stay put. the older man is actually a relative so we would hate to see him getting ripped off but at the same time we dont wanna get ripped off either. he is still looking for 220k so we told him put it up for that and come back to us if uv no interest in a few mths and we will see what we can do from there.

gigino

Man007 wrote: »

Maybe you will get a house cheaper in a few years but who knows its really just guess work.

Its almost certain prices will be cheaper in a year or two as more austerity kicks in, the croke park agreement is torn up, wages decrease, taxes increase ( inc property tax ), emigration continues etc. Do not forget the banks + nama have not started dumping properties on to the market yet - when they do, prices will fall further. Also interest rates are extremely low now - they can only rise. There is inflation in goods etc coming from China. Pensions etc are crippling the eurozone. Oil is going up as demand from China / India / emerging countries etc increases. The euro will slip against other world currencies. The PIGS problem is too great. And our government will not be able to borrow 18 billion a year to keep the lights on for ever. There are still hundreds of thousands of empty houses in the country. The euro will probably break up and we will not be in the top group. So many people are in mortgage arrears / debt. Personally I think the day will come when our giovt cannot borrow - even from the IMF/EU - enough to pay the guards / dole, and there will be rioting on the streets for food. And you think property prices may rise ?

I bet Paddy Power would think there is a 99% chance of prices falling another 20% minimum....anyone got any odds off bookies?

irishh_bob

gigino wrote: »

Its almost certain prices will be cheaper in a year or two as more austerity kicks in, the croke park agreement is torn up, wages decrease, taxes increase ( inc property tax ), emigration continues etc. Do not forget the banks + nama have not started dumping properties on to the market yet - when they do, prices will fall further. Also interest rates are extremely low now - they can only rise. There is inflation in goods etc coming from China. Pensions etc are crippling the eurozone. Oil is going up as demand from China / India / emerging countries etc increases. The euro will slip against other world currencies. The PIGS problem is too great. And our government will not be able to borrow 18 billion a year to keep the lights on for ever. There are still hundreds of thousands of empty houses in the country. The euro will probably break up and we will not be in the top group. So many people are in mortgage arrears / debt. Personally I think the day will come when our giovt cannot borrow - even from the IMF/EU - enough to pay the guards / dole, and there will be rioting on the streets for food. And you think property prices may rise ?

I bet Paddy Power would think there is a 99% chance of prices falling another 20% minimum....anyone got any odds off bookies?

agree about further austerity in ireland but the euro is here to stay , it would have died by now if it were going to , too many important global players ( china , usa ) would take a hit if the single currency were to flounder , greece has for all intents and purposes defaulted yet still they are bailed out , im not saying property wont fall further but thier is a degree of negative hysteria in the media , its all doom and gloom , in reality the global economy is in a much better place than it was twelve months ago

Man007

gigino wrote: »

Man007 wrote: »

Maybe you will get a house cheaper in a few years but who knows its really just guess work.

The euro will probably break up and we will not be in the top group.

God you make me laugh the euro will probably break up in your "expert" opinIon.

What makes you qualified to make a remark like that is it because you read it in some hysterical newspaper report or because everyone's saying it so it must be true.

Mark my words it WILL NOT happen just because people like you keep saying it doesn't make it through.

No ones saying house prices will rise next year but by how
Much they will fall is anyone's guess and to say 20% is generalisation as sought after areas will always hold there value more.

There have been recessions before and there will definitely be more in the future the economy will recover its just a matter of when.

gigino

Man007 wrote: »

God you make me laugh the euro will probably break up in your "expert" opinIon.

Its only my humble opinion. Throwing more money at Greece - a 3rd and 4th bailout- will not solve matters. Remember how our currency got devalued by 5% at the stroke of a pen against sterling one weekend about 20 years ago. IMHO there is going to be a two tier Europe - the Germans are not going to keep bailing out other countries for ever. I tried to find a bookies who would take a bet about the future of the Euro, but could not. Of course governments do not want people to know about the 2 tier Europe in advance or they will put their money / investments in the stronger currency. Either way property will fall more.

Man007

gigino wrote: »

. I tried to find a bookies who would take a bet about the future of the Euro, but could not.

Ha ha and what if your right what would you get paid out in according to you our new currency will be worthless against the euro you placed the bet in doesn't make much sense.

Tails142

Too hard to know, give it two years I think.

gigino

Man007 wrote: »

Ha ha and what if your right what would you get paid out in according to you our new currency will be worthless against the euro you placed the bet in doesn't make much sense.

"PuntNua" or whatever the new currency will be called. Possible a pigs note ( currency of Portugal, Italy,Greece + Spain. ) . Either way the current situation is unsustainable. When the top people from the Dept of Finance in Germany meet their equivalents in Ireland, they ask themselves why are they bailing us out when the fellows sitting across the table are paid twice as much. Our average public sector wage is €48k ; to put that in context, in the UK is £21.5k stg. Of course our currency will devalue.
And interest rates will rise. And property tax increase. And oil increase more. And imports from China cost more ( the euro have lost value against their currency already). And banks / NAMA have not offloaded empty or repossessed properties on to the market yet. Emigration will continue. The government will have to close the budget defecit more.
IMHO, anyone who thinks property prices are almost at the bottom will discover the show has not started yet. For the seventies, 80, 90, and noughties we had huge handouts from the EEC / EC : that will not continue. Farmers are currently getting half their money from Europe, that will not continue either.

Man007

God gigino I don't know how you sleep at night worrying about the end of the world you must be wrecked.

The only point I agree with is public sector wages are ridiculous for such a lazy shower of b*****s.

I don't know how they get away with yes there are many hard working but the ones who clearly do nothing should just be gotten rid of and let the unions do what they want the stories I have heard from people in public service if it happened in private sector they would be sacked..

That's my public sector rant over slightly off topic apologies

irishh_bob

gigino wrote: »

Its only my humble opinion. Throwing more money at Greece - a 3rd and 4th bailout- will not solve matters. Remember how our currency got devalued by 5% at the stroke of a pen against sterling one weekend about 20 years ago. IMHO there is going to be a two tier Europe - the Germans are not going to keep bailing out other countries for ever. I tried to find a bookies who would take a bet about the future of the Euro, but could not. Of course governments do not want people to know about the 2 tier Europe in advance or they will put their money / investments in the stronger currency. Either way property will fall more.

germany is determined to keep the single currency going , if it goes , so does thier plan to control the economies of europe , slowly but surely , greece , portugal , ireland and italy are being subsumed into a german federation

gigino

Man007 wrote: »

The only point I agree with is public sector wages are ridiculous for such a lazy shower of b*****s.

What about " And interest rates will rise.( they are historically low now ) And property tax increase. And oil increase more ". All of those will affect property price negatively in my humble opinion.

johndaman66

Man007 wrote: »

The only point I agree with is public sector wages are ridiculous for such a lazy shower of b*****s.

I don't know how they get away with yes there are many hard working but the ones who clearly do nothing should just be gotten rid of and let the unions do what they want the stories I have heard from people in public service if it happened in private sector they would be sacked..

Very much agreed, Public sector workers, the trade unions that represent them and pensioners have held the whole country to ransom for far too long now.

A few years back I went into Charlotte's Quay Tax Office to make an enquiry. Waited in the queue for a good long spell and went up to the desk when my turn came. Sat down in front of the Clerk only to listen to her rattle on to her friend on the phone for five minutes how she should go with such and such a wallpaper in this room and that in another room etc. Absolutely appalling, unprofessional and unacceptable work ethic. I know if I done it in my job I'd be shown the door pretty soon and rightly so. Sorry, I'm ranting now and derailing the thread, story for another forum, never mind another tread.

OP, I too am in the market for a house in County Limerick. Fair to say there ain't a fantastic pick of them at the right price in the County. Nice affordable houses that come onto the market seem to be in pretty rural locations or pretty poor sites. Nice properties that tick the boxes reasonably close to the city seem to be asking silly money.

I viewed a couple of properties in my local town before Christmas that had dropped in price recently at the time. I put offers in on both, hardly what one would consider extreme lowball in today's market as they were both within 20% of asking price. Both were rejected outright, no question of bargaining etc. so i walked away. As it happens both have gone sale agreed since so despite everything there seems to be a some activity out there. Having said that fair to say two houses hardly represent to whole market. Limerick County must surely be a bit of an anomaly in the Irish housing market at the moment. Its not like there are a serious amount of jobs and industry in the county anyway.

If the property is advertised if you would like to post or pm me a link I would try to give you my own honest, impartial opinion for what it may be worth to you. It would be nigh on impossible for people to give you a proper opinion from figures alone. For argument sake just because it was asking €x a couple of years back and asking €y now which is 50% less than €x now doesn't mean jack if it was disgracefully overpriced at original price.


Also, on the face of it, I would suggest that its unlikely the vendor will accept €180k if he is seeking offers close to €250k mark, not based on my experience anyway and despite the stories you'll hear down the pub! You never know though, everybody's circumstances are different and the fact he is a relation may (may not) shift the goalposts too

Villa05

johndaman66 wrote: »

Limerick County must surely be a bit of an anomaly in the Irish housing market at the moment. Its not like there are a serious amount of jobs and industry in the county anyway.

Limerick Corporation/Regeneration are buying up anything decent, the rest of the rubbish is being left for people who pay there own way - Sick Country, I thought stupid policies would have stopped when the IMF came in.

Was talking to a person at work yesterday who has to leave her rented accommodation because the landlord upped the rent by 100p/m. The house is currently being viewed by social welfare subsidised prospective tenants.

I live and work in Limerick, but not for too much longer. I would not buy a blade of grass there. Find some other fools to pay universal social charge to effectively increase your rent. :mad:

wildflower

i totally agree with the whole limerick scenario- the corporation are turning every estate into nightmare to live in for normal hard working families. i think thats why rural houses are being snapped up- at least you wont have some nutjob moving right beside you.
but limerick was one of the last prices for houses to rise in price so they might be the last to fall. but right now they are still crazy dear. we looked at a house half hour from city, very rural- nice dormer 4 bed but nothing spectacular and itwas 250k- IMO if ur dropping quarter a million, i better be getting a mansion!!! people are delusional!
where we are looking seems to be quiet popular- houses do seem to be selling tho- i see lots of sale agreed signs up.