Introduction

Over the years I have helped countless people buy their own home. There are significant differences in how you should approach the purchase of a house, new or second hand, and the following step by step guide will help you buy like a professional and you will end up with a much more rewarding purchase.

REMEMBER: The day you buy......... is the day you become the next seller, and you must be sure you are getting Value for Money!

Most important buying tip...... Make a plan!

The following are the steps you must follow when planning to buy a house and preferably in this order. Buying a house is not like buying a new car, you have just seen as you passed a car dealership or a new dress you've seen in the latest fashion magazine.


1. Find out how much money you can spend,
This will be the sum you have saved added to how much you can borrow.

How much you have saved will depend on how well you manage your money, if you spend all you money on having a good time and on travel you will limit your buying options.

How much you can borrow will depend on your earnings and how much you spend on other financial committments. Ever case in different. I cannot stress strongly enough how important it is to talk to your personal financial consultant at the earlierst possible. Obtain a certificate of loan approval. this will place you in the same position as a cash buyer, where the only thing standing between you and you new home will be a satisfactory valuation report.

Affordable Housing schemes How do they work?
It is now Government housing policy to acquire 20 % of new housing schemes, privately built, where the number of units in the scheme is greater than 4. If a builder has permission to build say, 100 units, 20 of those will be set aside for applicants of Local Authorities who qualify under the affordable housing terms and conditions or who qualify under the social housing terms and conditions. The expected distribution will be 15% affordable and 5% social.

How much will you pay for your house or apartment?
Let us say the house unit cost is 300,000 euro, the local authority will assess your case and may agree to sell the property to you for 200,000, which is a 33.33% discount, in some cases the amount of discount might be as high as 48 %. Fine if you stay in the property for 20 years as your Principle Private Residence, how much the discount will be, will vary from property to property.

What happens if you sell the property?
If you sell the house within the first 10 years, there are consequences you need to know about, so let us say for example that you sell the property for 400,000 euro (original value: 300,000 euro which you bought for 200,000 euro). The local authority will expect you to give back 133,333 euro of the sale price, which is 33.33% of the sale proceeds, which is the value of the original discount + 33.33 % of the profit, so in effect the Local Authority is claiming their share of the increase in the value of the property. From years 11 to 20 the amount of the claw back reduces by 10 % a year, so that at the end of year 20 you could sell up and keep all the profit Tax Free, Nice one, eh!

2. Find a solicitor,
Your solicitor is one of the most important people on your team. You must be comfortable talking to your solicitor and don't be afraid to ask your solicitor to quote for the business. You solicitor will check out the title of your proposed property before you buy it and only when your solicitor is satisfied will you be asked to sign any contracts. It is also advised, when you pay a deposit on a property, do so through your solicitor.

3. Find a property,
Buying a new house is very much different to buying a second hand house. Why?, because most often you are buying off a set of drawings or plans and by looking at a show house which is a sample of what you can expect at the end of the day. A second hand house is not a sample. It IS what you are buying, so be careful. Do not look at an existing house through rose coloured glasses, being influenced by the descriptions of a silver tounged sales agent. Remember the sales agent is there to do a job; to sell the property. He is working for the vendor to acheive the best price possible on a given day or over a period of time. He is not working for you: the purchaser, unless you actively engage a qualified professional to act on your behalf in the purchase of a house.


General Rules to follow to make the right Purchase:

1)Never buy a property on the basis of price only.
Any property, even at what might appear to be a bargain price, might turn out to be a disaster if the condition or location is wrong! Even if the condition is OK, you can't just pick it up and move it somewhere else!

2)Research the location.
Before you buy, you should ask why you are buying a house in this part of the country, be it rural, suburban or city. There should always be a reason, and not just because you like the look of the house. Where you live should mean something to you personally, like being close to family and friends, where you are comfortable or close to work, so you save time and money traveling to and from work. You might like to be close to an amenity? There should always be some reason behind the purchase .

3) Condition.
A house is more than just bricks and mortar, it is a place to live in and enjoy, a place where you can relax with family and friends, but it must be comfortable and healthy. But don't be put off buying a property in need of work, just get a suitably qualified engineer to carry out a full structural survey. On receipt of the survey report take note of the recommended repairs and if you want to make additional alterations, get a set of plans drawn which you can give to a reputable builder and ask for a quotation. When you have your quotation add this to the cost of buying the property as it is and then you need to ask a qualified valuer his opinion of the expected future value on completion of the work. If that value is less than the cost, you should either walk away or try to negotiate a better price to secure better value for money.

4)If buying New
It is important to find out how many houses the builder is going to build. If the builder is going to build a large number of houses, you may have to suffer the nuisence of builders vehicles passing your door for a prolonged period of time. Access may be denied for a long time as he completes a phase and feels it is safe to open the completed section of the site to occupants.

5)Value for Money
House price relative to house size. If you had the chance to purchase a 1,000 sq ft house for €300,000, or a 1,200 sq ft house for €320,000, which is the better deal? To find the answer we divide the price by the area we are buying to compare. €320,000 for a 1,200 works out at a cost of about €267 per square foot, while the 1000 Sq foot house has a cost per square foot of €300. So while the price is €20,000 cheaper over all, the cost on a per square foot basis is much dearer.

The Buying Process
Once you have found a property in your price range, the next step is to negotiate a price. Many buyers find it very difficult to negotiate a price as they are emotionally involved and fear losing what they can sometimes think is the only property for them. Never let the agent handling the sale of a property know how much you can spend. Most reputable agents will advise you of their minimum asking price, which may be realistic or not. If the property is of particular interest to you, offer the asking price as a one time offer and give the agent a short time (at most a few days) to consult with the vendor. If the agent comes confirms he has a higher offer, then move on to another property

Stick to your budget!
This is often the most difficult thing for a buyer to do and many fail to resist making a higher offer to secure the property, even a higher offer will not necessarily secure the property. To avoid getting into a bidding war, just move on.

Price agreed:
Once you have agreed a price, you will be asked to placa a deposit with the selling agent as a token of real intent. I recommed you make this payment through your solicitor, who will do so professionally. Paying a deposit does not secure the property and there are no contracts at this stage. Either you or the vendor can decide to change your mind. Once you have paid the deposit you will need to consider engaging the services of a suitably qualified engineer to carry out a property survey. This report will assure you the property is or is not in good condition, and if the property has any defects, you will need to discuss these defects with the engineer to determine if you should either cost the repairs needed or withdraw from the purchase.

Important: If you spotted something and brought it to the sales agents attention and you received an opinion that it was a minor defect, which your engineer considers to be a major defect you would have the right to revist the price offered to take into consideration the cost to carry out the repairs. Even if you didn't spot a defect, once identified, you have the opportunity to raise this issue before you sign a contract. There is no point in raising this issue after you have signed contracts. You may wish to discuss this issue at length with your solicitor.

Contracts
After you pay your deposit, the legal process begins. Contracts will be exchanged between the vendor's solicitor and your solicitor, and generally within a few weeks you will be asked to sign a contract. Even when you have signed the contract you have nothing. It is only when the vendor has signed the contract and sends your solicitor a copy, can you relax in the knowledge the property is going to be yours. One of the contract conditions will be to bring your deposit up to 10 %. This will include the amount of money you would have given to the sales agent. Another point will be a closing date, which is date upon which you will be expected to pay over the balance of monies due in return for a key.