First time buyers general advice/queries..

Ninja_Go

We are in the process of applying for a mortgage and am wondering generally are there any tips we should know about to help us when buying?

- if we register interest with an EA might they alert us to houses coming to market before advertising publicly?

- are all houses underpriced to attract interest? Our budget is tight enough for the area we're looking at so should I be looking at houses well under budget to allow for bidding wars?

- We've been told by one bank we should get AIP pretty quickly but a couple of factors will delay drawdown of funds (clarity around our employment contracts etc); should we wait until these factors are no longer issues before bothering to make offers? Or is the drawdown of funds a standard issue that delays the selling process? Any examples people can share?

Sorry if this post is somewhat vague/ reeking of naivety, we are just totally clueless about the process.

Thanks in advance

1641

Re Q1 Most likely not. Depending on where you are looking there are probably loads registered with Estate Agent, who will be aiming to get a price war going. The more who know about it the better for this.

Q2 Some agents tend to low price as a strategy to get as many interested as possible (see price war above). Some others will price a bit high (often to flatter the vendors and persuade them to choose this Estate Agent rather than a more prudent competitor). Many will aim to get it as about right as possible, and believe this is the best strategy. In the end, of course, the market decides so they may get it wrong. An exception to all this relates to auctions (as opposed to private treaty sales). I would say that more often than not in auctions the AMV advertised is an underestimate (and sometimes considerably so).

I can't give any opinion on Q3.

Thats my tuppence worth.

awec

If you're buying a new build the price is the price, no bidding involved, so you should look at houses within your budget or below, no need to go well below your budget.

Ninja_Go

1641 wrote: »

Re Q1 Most likely not. Depending on where you are looking there are probably loads registered with Estate Agent, who will be aiming to get a price war going. The more who know about it the better for this.

Q2 Some agents tend to low price as a strategy to get as many interested as possible (see price war above). Some others will price a bit high (often to flatter the vendors and persuade them to choose this Estate Agent rather than a more prudent competitor). Many will aim to get it as about right as possible, and believe this is the best strategy. In the end, of course, the market decides so they may get it wrong. An exception to all this relates to auctions (as opposed to private treaty sales). I would say that more often than not in auctions the AMV advertised is an underestimate (and sometimes considerably so).

I can't give any opinion on Q3.

Thats my tuppence worth.

Thanks very much, really appreciate the response

Lux23

awec wrote: »

If you're buying a new build the price is the price, no bidding involved, so you should look at houses within your budget or below, no need to go well below your budget.

Is that true? Do people not offer more to get a new build? No wonder people queue up for days.

Ninja_Go

awec wrote: »

If you're buying a new build the price is the price, no bidding involved, so you should look at houses within your budget or below, no need to go well below your budget.

No new builds whatsoever in the areas we can afford, close by the new builds are 20,000+ over budget. Thanks for the reply.

awec

Lux23 wrote: »

Is that true? Do people not offer more to get a new build? No wonder people queue up for days.

First come, first served (unless you know the developer), pick your house and pay the deposit there and then.

CPSW

I am in the process of hunting at the moment and we have made our first bid.  One bit of advice is to set your budget once you get approved and stick to it.  For example if you are approved for 300k, you should look at houses around 250k.  As expected I am finding bidding wars are getting out of hand!  Best of luck to you.

LirW

- We've been told by one bank we should get AIP pretty quickly but a couple of factors will delay drawdown of funds (clarity around our employment contracts etc); should we wait until these factors are no longer issues before bothering to make offers? Or is the drawdown of funds a standard issue that delays the selling process? Any examples people can share?

It depends on what these factors are and how long it takes to get some clarity. You have to show the proof of funds pretty early on if you're buying in an urban area, rural EAs are often more laid back about it but prepare that nobody takes your bids seriously without AIP.
If the bank gives you AIP and you go Sale agreed on a house, it realistically takes you at least 8 weeks but most of the time a lot longer than that to close the sale (8 weeks to 12 months).
Best thing is talk to your bank/broker about this, they can answer that quick enough.

Ninja_Go

CPSW wrote: »

I am in the process of hunting at the moment and we have made our first bid.  One bit of advice is to set your budget once you get approved and stick to it.  For example if you are approved for 300k, you should look at houses around 250k.  As expected I am finding bidding wars are getting out of hand!  Best of luck to you.

OK thanks...that's pretty significant advice as we are approved for €220,000 plus deposit our absolute max will be €245,000, so we will need to look at €200,000 mark I suppose? That's disheartening but good to know

Ninja_Go

LirW wrote: »

It depends on what these factors are and how long it takes to get some clarity. You have to show the proof of funds pretty early on if you're buying in an urban area, rural EAs are often more laid back about it but prepare that nobody takes your bids seriously without AIP.
If the bank gives you AIP and you go Sale agreed on a house, it realistically takes you at least 8 weeks but most of the time a lot longer than that to close the sale (8 weeks to 12 months).
Best thing is talk to your bank/broker about this, they can answer that quick enough.

We'll be buying in Dublin. I'm entering a third successive contract in September so they want to see that contract which I won't receive until then; my husband is over halfway through a probation period which ends mid October so they have said that funds can't be drawn down until that probation ends. Otherwise it seems everything else is in order and one bank said they can give AIP while waiting on these conditions. Therefore if we got AIP say at the beginning of September could we be ok to make offers? With drawdown pending mid October...?

LirW

Yes you can offer, because if you find something in September, the change that the drawdown will be in October is next to zero.

Happy house hunting!

Ninja_Go

LirW wrote: »

Yes you can offer, because if you find something in September, the change that the drawdown will be in October is next to zero.

Happy house hunting!

Thanks so much for the response..can you just clarify what do you mean by "the change that the drawdown will be"

If we get AIP of an amount this is valid for 6 months so what will change? Thanks

LirW

Sorry, I meant chance. Once you are sale agreed the whole process takes a few weeks to months until the drawdown. Your bank and solicitor will guide you through the whole process. Ask them as many questions as you want, that's what they're there for.

Ninja_Go

LirW wrote: »

Sorry, I meant chance. Once you are sale agreed the whole process takes a few weeks to months until the drawdown. Your bank and solicitor will guide you through the whole process. Ask them as many questions as you want, that's what they're there for.

OK great to know, thanks!

c6ysaphjvqw41k

This post has been deleted.

1641

awec wrote: »

First come, first served (unless you know the developer), pick your house and pay the deposit there and then.

Would you need to be also factoring in the cost of VAT when paying a deposit on a new build ?

awec

Walker Scary Barracuda wrote: »

This post has been deleted.

1641 wrote: »

Would you need to be also factoring in the cost of VAT when paying a deposit on a new build ?

It's not the full deposit amount, it's a booking deposit that's a fixed amount. 5-10k as you say.

You can pay by bank transfer, I doubt they accept cash.

morrga

Ninja_Go wrote: »

OK thanks...that's pretty significant advice as we are approved for €220,000 plus deposit our absolute max will be €245,000, so we will need to look at €200,000 mark I suppose? That's disheartening but good to know

If you have €245,000 to spend then look at houses up to 235-240. You don't have to drop to 200k. Also if you buy a new home for 240, Revenue will give you €12,000 of a tax refund thus your capable of buying a house in the 250 mark.

Ninja_Go

morrga wrote: »

If you have €245,000 to spend then look at houses up to 235-240. You don't have to drop to 200k. Also if you buy a new home for 240, Revenue will give you €12,000 of a tax refund thus your capable of buying a house in the 250 mark.

Whoa wait where is that tax refund coming from?! Why have none of the banks mentioned that?

I was basing the drop in price range on a comment made by someone else that prices are often advertised well below price to attract interest leadingto a bidding war/inflated price.

By looking at houses priced €240000 we don't have much room for manoeuvre making bids..

c6ysaphjvqw41k

This post has been deleted.

Ninja_Go

Walker Scary Barracuda wrote: »

The first time buyers grant? Its through Revenue not the bank. Also there's talk of them scrapping it in the next budget.

Therein lies my naivety, no knowledge of this whatsoever! Bank mentioned Help to Buy scheme but not this..Jesus that'd be a major help. . Is that in the form of tax credits? Or is is it a direct refund? Does it come through at the end of the year?

c6ysaphjvqw41k

This post has been deleted.

1641

morrga wrote: »

Also if you buy a new home for 240, Revenue will give you €12,000 of a tax refund

I thought the OP was looking to buy a second hand house, not new ?

morrga

Ninja_Go wrote: »

Whoa wait where is that tax refund coming from?! Why have none of the banks mentioned that?

I was basing the drop in price range on a comment made by someone else that prices are often advertised well below price to attract interest leadingto a bidding war/inflated price.

By looking at houses priced €240000 we don't have much room for manoeuvre making bids..

To be realistic I think the bidding wars are happening on houses from 350-450 range. Houses in and around the 240 mark wouldn't have the same appeal in terms of location and or build so shouldn't attract the same sort of frenzied bidding. Obviously that is a perception so open to correction.

morrga

1641 wrote: »

I thought the OP was looking to buy a second hand house, not new ?

Correct. I was suggesting a redirection to new homes to help add an extra 12k to the budget. Plus no one should ever turn down money from the tax man if at all possible

Alf Veedersane

Ninja_Go wrote: »

OK thanks...that's pretty significant advice as we are approved for €220,000 plus deposit our absolute max will be €245,000, so we will need to look at €200,000 mark I suppose? That's disheartening but good to know

Knowing how much you're able to pay is one thing but just be aware of what that will be in repayments as well just to have an idea of where repayments are versus rent. It might impact on how much you actually want to spend.

CPSW

Ninja_Go wrote: »

CPSW wrote: »

I am in the process of hunting at the moment and we have made our first bid.  One bit of advice is to set your budget once you get approved and stick to it.  For example if you are approved for 300k, you should look at houses around 250k.  As expected I am finding bidding wars are getting out of hand!  Best of luck to you.

OK thanks...that's pretty significant advice as we are approved for €220,000 plus deposit our absolute max will be €245,000, so we will need to look at €200,000 mark I suppose? That's disheartening but good to know

I know it sucks but we got the same advice, the house we are bidding on has gone up over 20 grand in 4 days with the bidding parties involved.  I knew it was tough going out there but not that crazy that quick!

Ninja_Go

morrga wrote: »

Correct. I was suggesting a redirection to new homes to help add an extra 12k to the budget. Plus no one should ever turn down money from the tax man if at all possible

Ah sorry I didn't see that you mentioned new homes in your original post, we won't be able to afford a new build anywhere near the area we are looking at, they're all significantly over budget but thanks for the suggestion.

Ninja_Go

CPSW wrote: »

I know it sucks but we got the same advice, the house we are bidding on has gone up over 20 grand in 4 days with the bidding parties involved.  I knew it was tough going out there but not that crazy that quick!

Wow! That's scary stuff!

Ninja_Go

Alf Veedersane wrote: »

Knowing how much you're able to pay is one thing but just be aware of what that will be in repayments as well just to have an idea of where repayments are versus rent. It might impact on how much you actually want to spend.

Repayment wise we are fine our absolute limit is €245,000 based on a mortgage of €220,500

Ninja_Go

1641 wrote: »

I thought the OP was looking to buy a second hand house, not new ?

Yes we won't be able to afford a new build anywhere near our areas of interest

CHealy

Ninja_Go wrote: »

Wow! That's scary stuff!

Whereabouts in the country are you? We started out in January on a similar budget to you and we signed contracts in the last few weeks, but I think we got lucky. We are in Cork and in the time we started bidding in late January houses went from going 30k over asking to 50k+ in a few months and its only rising. If we were to have to start again I dont think Id be able to afford anything in the city and would have to move way out, which I wasnt willing to do.

CPSW

CHealy wrote: »

Ninja_Go wrote: »

Wow! That's scary stuff!

Whereabouts in the country are you? We started out in January on a similar budget to you and we signed contracts in the last few weeks, but I think we got lucky. We are in Cork and in the time we started bidding in late January houses went from going 30k over asking to 50k+ in a few months and its only rising. If we were to have to start again I dont think Id be able to afford anything in the city and would have to move way out, which I wasnt willing to do.

If this question is to me, I am in Dublin, house is in the Dublin 7 area.  We went in low with our offer, with more parties making bids they jumped in over the asking price (probably thinking they could eliminate us from the process, not knowing its still within our budget).  Its gone up and up but the amounts of each increase  have slowed down, so still hopeful. 

First time bidding so all new to the experience, its been eye opening so far!

Ninja_Go

CHealy wrote: »

Whereabouts in the country are you? We started out in January on a similar budget to you and we signed contracts in the last few weeks, but I think we got lucky. We are in Cork and in the time we started bidding in late January houses went from going 30k over asking to 50k+ in a few months and its only rising. If we were to have to start again I dont think Id be able to afford anything in the city and would have to move way out, which I wasnt willing to do.

We're in Dublin. I work in Wicklow and my husband works in Parkwest and doesn't drive; we are looking in parts of Tallaght and Clondalkin, mostly at former council houses as these are priced within our budget owing to size and location. I'm from Tallaght so I have a fair idea of locations that we're ruling in and out, don't know clondalkin well at all and would prefer to be buying in Tallaght but houses are only up and they're gone again, and too early to check the register to see what they're going for.

CHealy

CPSW wrote: »

If this question is to me, I am in Dublin, house is in the Dublin 7 area.  We went in low with our offer, with more parties making bids they jumped in over the asking price (probably thinking they could eliminate us from the process, not knowing its still within our budget).  Its gone up and up but the amounts of each increase  have slowed down, so still hopeful. 

First time bidding so all new to the experience, its been eye opening so far!

It can be incredibly deflating and I say that as a newcomer aswell. Patience is key, dont jump into any panic bids and know when you are done. I think we bid on 10 houses and every single one was "the one" but once they went way over and we had to step back you shortly find yourself completely forgetting about it. A house is what you make of it after the buy.

Ninja_Go wrote: »

We're in Dublin. I work in Wicklow and my husband works in Parkwest and doesn't drive; we are looking in parts of Tallaght and Clondalkin, mostly at former council houses as these are priced within our budget owing to size and location. I'm from Tallaght so I have a fair idea of locations that we're ruling in and out, don't know clondalkin well at all and would prefer to be buying in Tallaght but houses are only up and they're gone again, and too early to check the register to see what they're going for.

You sound like you know exactly what you are after and you seem realistic as to what you can afford, thats one hurdle crossed already. It might take some time but something always pops up. As I said I am in a similar position to you budget wise and we have purchased an old council home that needs alot of work but its all part of the journey.

Ninja_Go

Further query - is it OK to get AIP from more than one lender? KBC seem confident they'll give us AIP and I'm also in touch with a broker. .if KBC give us AIP then should I notify the broker? Thanks. .

Samuel T. Cogley

Get AIP from as many banks as possible, some won't go through brokers. Brokers are more of a hinderer than a help in many situations - putting that aside get yourself the best deal. In regard to once you go sale-agreed keep looking! It's about 50/50 that the sale will go through at that point. The mistake people make is having to start from square on should something start to go wrong on the property they've set their minds on.

Ninja_Go

Samuel T. Cogley wrote: »

Get AIP from as many banks as possible, some won't go through brokers. Brokers are more of a hinderer than a help in many situations - putting that aside get yourself the best deal. In regard to once you go sale-agreed keep looking! It's about 50/50 that the sale will go through at that point. The mistake people make is having to start from square on should something start to go wrong on the property they've set their minds on.

Great advice, thanks. If we were to go Sale Agreed on a property, then make an offer on another and that too goes Sale Agreed, can we pull out of the first property? What's the key difference between Sale Agreed and Sold? I.e. what steps are involved? Money drawn down, paid over, contracts & keys exchanged I presume is Sold; what's involved in being Sale Agreed?
Thanks

awec

Pretty sure Sale Agreed just means your offer has been accepted, but nothing is binding until contracts are signed.

So while you are sale agreed the vendor can back out with no consequences, but so can you.

1641

awec wrote: »

Pretty sure Sale Agreed just means your offer has been accepted, but nothing is binding until contracts are signed.

So while you are sale agreed the vendor can back out with no consequences, but so can you.[/QUO

Correct. "Sale Agreed" is non-binding - it involves paying a booking deposit to the EA but this is fully refundable if you pull out (or the vendor pulls out).

Next the Vendor's solicitor prepares a "contract for sale" and sends it to your solicitor. If your solicitor approves it you will be invited to sign it and pay a purchase deposit. Once you sign this you are committed to the purchase and can only withdraw as per explicit conditions in the contract - the vendor has to provide good title etc. (DO NOT sign the contract unless you are sure you are committed). After this the vendor is invited to sign - when they do they are committed.

The two solicitors then work on the legalities of it and agree a closing date. This is when you pay the rest of the price and the property is yours, ie, "Sold".

This is briefly the sequence (leaving mortgage issues aside) for a "Private Treaty" sale (when all runs smoothly!). It is very different for a "Public Auction".

You will need to organise a survey also.

Samuel T. Cogley

You don't want to go sale agreed on two properties, sale agreed is the period where you've an offer in which has been accepted and everyone is doing their due diligence. As such keep looking as you never know what that due diligence will turn up.

Ninja_Go

Samuel T. Cogley wrote: »

You don't want to go sale agreed on two properties, sale agreed is the period where you've an offer in which has been accepted and everyone is doing their due diligence. As such keep looking as you never know what that due diligence will turn up.

Sorry just to clarify - keep looking in case the first property falls through, but don't make an offer on a second property in case the first one goes ahead? What if we've gone sale agreed on one house and then a more desirable property comes our way, we go sale agreed on the second property..are we within our rights to pull out of the first property? If not, why not?

1641

Ninja_Go wrote: »

Sorry just to clarify - keep looking in case the first property falls through, but don't make an offer on a second property in case the first one goes ahead? What if we've gone sale agreed on one house and then a more desirable property comes our way, we go sale agreed on the second property..are we within our rights to pull out of the first property? If not, why not?

Yes you are legally entitled to pull out, even if sale agreed - up until you sign the contract for sale (with your solicitor).

If the same estate agent is involved in both transactions (or if its a more rural area where all EAs are likely to be aware of what is happening) there is a possibility that EA may advise the second vendor that you may be unreliable purchasers, more likely to change your minds. So,there is a risk.

Samuel T. Cogley

As above, you keep looking but pull out of the first, with cuase, before you go sale agreed on the second. A very good mover of things is saying 'look I'm pulling out completely' but you have to be serious.

My brother-in-law was strung along for what seemed like months before he said, 'look forget it'. The very next day there was an agreement to all of his terms whereas if they'd just negotiated from day one he would have met them in the middle. We were strung along for months and eventually only managed to negotiate a small reduction in price - what we didn't know if the vendor had lost the house they were purchasing due to the delay, it was only serendipity that they eventually got it back and our moved happened. We could have been six months later and starting again.

greensheep777

Question.
Let's say I get approved for a mortgage and have 6 months to house hunt.
At the end of the 6 months, I have not found a house.

Do I have to apply all over again and does it have any negative effect on my application or on my credit rating?

ILikeBoats

Yes you need to reapply. No negative effects. In theory, you should have more saved so could get approved for a higher amount on the second AIP

awec

ILikeBoats wrote: »

Yes you need to reapply. No negative effects. In theory, you should have more saved so could get approved for a higher amount on the second AIP

Unless the rules change in the mean time, in which case you'd have to meet the new rules which could mean you get less or you are no longer able to apply at all.

ILikeBoats

True!