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Pre-contract signing jitters
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13-10-2019 8:15pm#1I've been asked by my solicitor to sign contracts for a two bed apartment I went sale agreed on. I've suddenly been overcome with the jitters and am not 100% sure I want to go through with it. A few concerns were raised over fire issues (which aren't fully resolved yet) and it's caused me to really review my situation overall.
I was approaching the purchase firstly from a financial perspective, then personal reasons a distant second. Looking at the outlays I have in rent and bills at the moment and compare it with the mortgage interest and bills associated with house ownership (including the initial outlay), it would only make sense if I rented out a room for an extended period of time.
At that, it would probably take 2 years to break even compared with what I would have had in savings if I didn't buy (assuming property prices stagnated). It would then take another 2 years to break even if I decided to sell (just to cover selling costs). Add another year or two to cover the buying costs of another property if I decided to buy somewhere else. When I start to think about it, it seems that I would be in the exact same financial situation in 5 years time in either scenario! Of course, this all depends or property value at the time.
If I had enough money right now, I would have purchased a house. But realistically I would not be able to afford this in the area I want as a single buyer. Am I crazy to buy an apartment now when my goal in 5-10 years is to own a house? It's a great property, as far as apartments go, and in a great location (although personally not my ideal). I feel there's a lot of uncertainty over house prices going forward, and my own uncertainty if it's the right decision, but also feel that if I don't buy something now I will be forever renting.
I've also spent a chunk of money to valuations, solicitor fees, surveys etc. and feel committed now. I'm wondering if it's just because I'm about to sign contracts and the fact that there's no turning back afterwards is making have second thoughts.
Is this a normal thought process or could I be entering into an agreement I might regret?0
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I think everyone has jitters - it's one of the biggest commitments you will ever make. One thing I would say is that if you go into this with an attitude of "it might not be perfect, but whatever happens over the next few years I'll make the best of it", it's a lot easier than continuously questioning yourself. A few questions I'd perhaps suggest asking yourself:
If there was a major price fall and you were unable to sell for 10 years, is this a risk you are willing to take and a place you would be happy to live in?
How much of an unknown is the first safety issues. Is it likely to lead to a smallish bill, or a potential large bill?
Why is a house so important? Is there deal-breakers in an apartment (e.g. you want a large garden).
Is something likely to happen in the next 5 years which will make it more likely that you will be able to buy the house you want?
Are you over-stretching yourself on your mortgage? If you couldn't (or didn't) rent a room, can you pay the mortgage?
Do you like where you are renting? Are you comfortable with the downsides of renting e.g. lack of security?0 -
I think everyone has jitters - it's one of the biggest commitments you will ever make. One thing I would say is that if you go into this with an attitude of "it might not be perfect, but whatever happens over the next few years I'll make the best of it", it's a lot easier than continuously questioning yourself. A few questions I'd perhaps suggest asking yourself:
Some very good questions and advice, thanks. I'll answer them one by one.If there was a major price fall and you were unable to sell for 10 years, is this a risk you are willing to take and a place you would be happy to live in?
I think so. It has everything I need, but just isn't my ideal home/location.How much of an unknown is the first safety issues. Is it likely to lead to a smallish bill, or a potential large bill?
I had worries it could be a large bill, but these concerns have lessened lately, but still a potential worry.Why is a house so important? Is there deal-breakers in an apartment (e.g. you want a large garden).
I'm currently renting a house and I am quite comfortable in this arrangement. It's easy for cycling to work (apartment I will have to lug my bike up a number of flights of stairs) and feel there's much more flexibility if I ever want to do renovation works or an extension in the future.Is something likely to happen in the next 5 years which will make it more likely that you will be able to buy the house you want?
The only thing I can foresee is a stagnation of house prices and my salary/savings increasing, thus allowing me to purchase a property of higher value in an area I prefer.Are you over-stretching yourself on your mortgage? If you couldn't (or didn't) rent a room, can you pay the mortgage?
Marginally. I would need a family loan (gift) initially and then would have a small amount left over each money which I will be saving. Although I am paying into a pension which I could decrease if I entered financial difficulty.Do you like where you are renting? Are you comfortable with the downsides of renting e.g. lack of security?
I do like where I'm renting as it feels like my home because I've been here so long. It's not perfect (maintenance wise), but the location is great. There is a cloud over my head wondering how long it will last (landlord could decide to sell up, who knows), but I've had no indication as of yet.
I nearly feel that I'm putting myself down this avenue because I feel it's something I should do, but not necessarily want to do right now. I may be falling into the trap of just getting onto the property ladder.0 -
Will the fire issues be a concern if selling on? Or does the management company have the funds in place to fix it?
I personally am wary of buying anything linked to a management company (although you can’t avoid with an apartment). You’ve no control over the management company but any issues with them could mean you can’t sell it i.e. lack or small sinking fund, being part to litigation, accounts at a loss. Everything might be fine now but could change in future. Also the fees can change in future if management company have a big expense so thats hard to budget for.0 -
You sound a bit like me when I went sale agreed on a house I had nagging doubts over. In the end, I backed out of the sale and found something I liked much better later. Most people end up compromising to some extent but your compromises sound too big for my liking. Having to lug your bike up all those stairs will get old fast. Especially if you have some shopping with you. The fire issue is another biggie. That could make your apartment hard to sell, especially if another Priory Hall type story makes the news.
Would you even have considered buying here if you weren't putting yourself under pressure to buy? As you alluded to yourself, nobody knows what the housing market will be like in a few years time. I seem to recall apartments sustaining a bigger price fall than houses. Many people got trapped in apartments they'd bought just to get onto the housing ladder. Would you be at peace still living there in 10 years time?
Edit: I meant to mention that when I backed out of the purchase of my house purchase, I'd paid the surveyor and valuer. The few hundred euros you've paid them is insignificant in the grand scale of things. It's easy for me to advise you not to buy this from behind an anonymous screen but these don't sound like mere jitters to me.0 -
Will the fire issues be a concern if selling on? Or does the management company have the funds in place to fix it?
I personally am wary of buying anything linked to a management company (although you can’t avoid with an apartment). You’ve no control over the management company but any issues with them could mean you can’t sell it i.e. lack or small sinking fund, being part to litigation, accounts at a loss. Everything might be fine now but could change in future. Also the fees can change in future if management company have a big expense so thats hard to budget for.
There is a sinking fund, and the management company appear to be on top of various things such as fire alarm upgrades. The fees are substantial at the moment, but partly due to these upgrade works.Ursus Horribilis wrote: »You sound a bit like me when I went sale agreed on a house I had nagging doubts over. In the end, I backed out of the sale and found something I liked much better later. Most people end up compromising to some extent but your compromises sound too big for my liking. Having to lug your bike up all those stairs will get old fast. Especially if you have some shopping with you. The fire issue is another biggie. That could make your apartment hard to sell, especially if another Priory Hall type story makes the news.
There is a lift in the apartment, but I don't know how practical it would be to bring a bicycle when other people want to get in/out. Maybe I'm making excuses.Ursus Horribilis wrote: »Would you even have considered buying here if you weren't putting yourself under pressure to buy? As you alluded to yourself, nobody knows what the housing market will be like in a few years time. I seem to recall apartments sustaining a bigger price fall than houses. Many people got trapped in apartments they'd bought just to get onto the housing ladder. Would you be at peace still living there in 10 years time?
I had not thought of buying in this location at all, but someone suggested I check it out. To be honest, I didn't even know where it was when they told me! I have been looking to buy for 4 years now and missed out because I kept waiting to build a bigger deposit and salary, now I'm priced out of the places I originally looked at. I'm worried that I might miss the boat again if I don't buy now.Ursus Horribilis wrote: »Edit: I meant to mention that when I backed out of the purchase of my house purchase, I'd paid the surveyor and valuer. The few hundred euros you've paid them is insignificant in the grand scale of things. It's easy for me to advise you not to buy this from behind an anonymous screen but these don't sound like mere jitters to me.
There is a niggling thought that seeing as I have a solicitor on board, I'm sure I've racked up between €1000-€1500 in overall fees at this stage which could go down the swanny if I pull out.0 -
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I know you've committed a lot of money in legal /surveyor fees but ploughing ahead with something you may regret buying just because of this is an awful reason. You'll be long enough living there. This sounds like a panic buy to me.0
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While your calculations over the next 5 years are interesting - it’s impossible to predict what might happen realistically.
I’ve bought & sold three houses in the last 15 years. They all involved costs but also a better place to live. If I had given too much importance to those costs then I’d still be living in my first house with the mortgage paid off. But I’d rather be where I am now despite still having a mortgage with many years to run.
At first I thought that you had made a knee-jerk decision to get on the ladder. But you’ve been looking for 4 years! There’s bound to be some commitment issues at this stage. Lugging the bike upstairs is a false objection if there’s a lift. I’d be more concerned with the long term costs maintenance involved in a place with lifts though.
A big question is how long have you been renting your current place? If the landlord decided to sell up would you have to pay a big increase to rent something similar? Do you see yourself staying in your current job in the short, medium or long term?0 -
While your calculations over the next 5 years are interesting - it’s impossible to predict what might happen realistically.
I’ve bought & sold three houses in the last 15 years. They all involved costs but also a better place to live. If I had given too much importance to those costs then I’d still be living in my first house with the mortgage paid off. But I’d rather be where I am now despite still having a mortgage with many years to run.
The truth is that where I'm renting is a better place, location wise. It could do with a bit of TLC (lick of paint and some repairs), and one of the housemates is a slight annoyance, but it would be impossible to buy somewhere here as a single applicant.At first I thought that you had made a knee-jerk decision to get on the ladder. But you’ve been looking for 4 years! There’s bound to be some commitment issues at this stage. Lugging the bike upstairs is a false objection if there’s a lift. I’d be more concerned with the long term costs maintenance involved in a place with lifts though.
The management fees are quite high as a result. I've factored this into my calculations though. You would inevitably pay the same in repairs to a house elsewhere, or at least that was my thinking.A big question is how long have you been renting your current place? If the landlord decided to sell up would you have to pay a big increase to rent something similar? Do you see yourself staying in your current job in the short, medium or long term?
I've been renting in my current place for a long time - 7 years now. If the landlord decided to sell I would certainly be looking at paying at least €200 if not €300 extra for something similar. But who knows what his plan is. If I knew I was being kicked out tomorrow it would certainly change my view on things and this apartment purchase would be a clear winner.
All going well I will be in my current job for the foreseeable future with no plans to leave. A recession may change this view though!0
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