So you are thinking about buying a home, you may be a first time buyer or you may be in the market trading up to a larger home. Whatever step of the property ladder you are on there are a few simple steps you will need to take now. We have prepared a general guide to buying property in Ireland, and we hope you find our overview interesting and helpful.
How much can I afford?
The first step in buying your home is figuring out how much you can afford. Your first port of call should be to contact a mortgage advisor. They will be able to indicate how much you can borrow based on your earnings, your current financial commitments and any other savings you may have.
When successful with a mortgage application you will be given “Approval in Principle”. This is how much the lending institution is prepared to give you (in principle – i.e. terms and conditions apply). You now know how much you can afford but you should take into account the costs of buying a home before you go house hunting.
Cost of buying a home
You should be aware that there are many costs involved in buying a home other than the obvious.
Stamp Duty has been reduced in Budget 2011 to 1% on all transactions up to 1 million euros, and 2% on all transactions over 1 million euros.
There is no standard charge for conveyancing (the term for the legal process of buying and selling property) but you should be prepared to set aside around 1% of the property price for your solicitor.
Recently, due to the high price of property, some solicitors have started offering flat rate conveyancy. It’s worth shopping around to get a deal that suits you best.
Your lending institution will probably require a valuation report of the property you intend to purchase. This is needed as proof that the property you are buying is worth the money you are paying for it (This information is equally valuable to you). Valuation prices start at approximately €150.
Home Insurance & Life Assurance
Most lending institutions will require you to take home insurance on your property in case of fire or other damage. Further, you may also be required to have a life assurance policy with mortgage protection.
Go Property Hunting
The best way of finding property is on Ireland’s largest property websites, myhome.ie, daft.ie and property.ie, all of the leading Estate Agents will have their properties on view there, its also a good idea to drive around local areas that you would like to live, to see “For Sale” signs.
When you find a home that interests you, you need to make an offer. There are two methods by which property is commonly sold: private-treaty & public auction.
If a property is for sale by private treaty you simply make a verbal offer to the seller or estate agent. If the seller is happy with your offer the property is sale agreed to you. If there are a number of people making offers for the same property it is up to the seller to decide who wins – this is usually the person with the highest offer. The benefit to the purchaser in a private-treaty sale is that the offer made is not legally binding and you can withdraw your offer. If your offer is accepted, you can then finalise the details with your lender who when satisfied will give you a Letter of Offer. This letter is a formal agreement to lend you a particular amount.
In an auction the person with the highest bid wins. A bid at an auction is legally binding and you are unable to withdraw your offer. Generally you are required to pay your booking deposit immediately after a successful bid. Due to the legally binding nature of an auction it is necessary to have a Letter of Offer (i.e. full mortgage approval) from your lender before bidding.
Once your bid or offer is accepted, the next steps are: