First time buyer questions

[new_one2020]

Hi,

We're interested in buying a house around Cork. We would be first time buyers and don't have the full picture of how buying exactly works in Ireland. Ideally we would like to buy a newly built property. Could you help me understand some of the unspoken details of buying a house here?

We have accounts both with Ulster Bank and KBC which seems to be beneficial as these two have the best offers. Currently we are browsing properties online to get to know the area a bit better. When should someone apply to the bank, before one finds a property or when you have already selected the house? It seems confusing to me to see a question about the property address on bank forms as I wouldn't know this now.

We both work in the private industry, have normal salaries, regular bonuses, RSUs but also stocks through employment discounts - which of these would banks usually take into consideration? We have no debts or loans except for a credit card that is paid off fully every month since I have it. Deposit is already put aside and waiting patiently. All taxes for previous years cleared by Revenue.

How does it work to get a mortgage through a broker? Is it recommended? Anything to watch out for when doing so?

At what stage of buying a property does one need to get a solicitor and why is one necessary? Do I need to select one or is it something that is being assigned?

Let's say I like a new property for 300,000€, I've visited it and it's great etc. and one of the banks agrees to give me a mortgage, what are the next steps? Also - is there usually bidding etc. involved? or first come first served for new builds? From what I've read from other posters this is very complicated in Ireland and it seems that the prices advertised are never the ones for which a property gets sold...

Is it easy to get the help-to-buy scheme?

Sorry for the huge block of text but I hope that at least some of my questions can be clarified and that I will learn where to start with the whole process. Let me know if you have any additional questions on things that I haven't mentioned that might have impact on the whole process. Thanks for your time.

 

[mf1]

This is a very good guide.

Buying a home - step by step - CCPC

We have put together a step by step guide that will help guide you through the whole process.

www.ccpc.ie

mf

 

[Jazz01]

We're interested in buying a house around Cork

Well you are off to the best start in your new home search.

There are lots of threads in relation to mortgages on AskAboutMoney, so have a read through those (some of which are here). A lot of the posters have gone through a purchase in recent times so will be able to assist with specific questions that you may have, but for the moment, what @mf1 posted is an ideal start.

and welcome to AskAboutMoney !

 

[cremeegg]

My response.

Mortgage. You can and probably should apply early in the process, before you have selected your house. You can get 'approval in principal' that means the bank will lend you a certain amount based on your income. They will still want to see reports on the actual house you want to buy. A broker is probably a good idea if you feel unsure of the process, but not really necessary, they do not cost you anything (probably).

Solicitor. Strictly speaking you do not need a solicitor, but it would be very unwise not to have one. You simply contact some solicitors and pick the one you like. No one will assign you one. While some solicitors do overcharge, a good service, someone who does lots of house purchases and responds quickly is important, do not over fixate on the cost. Again get one early, rather than late in the process.

The above steps are fairly straightforward.

Buying/bidding. This is where the 'unspoken details of buying a house here' really start. With new builds it can usually be staightforward, they tell you the price, if you are happy you agree to pay it. With secondhand homes and less often with new builds the haggling over the price can resemble a street market. Both you and they can say anything and it has no consequence, 'the asking price is €300k', 'OK I will pay €300k', 'actually we want €350k' or equally you can say 'we will offer €400k" they accept then you can say ' we have had a rethink we will only pay €380k'. In my opinion the only way to look at this stage is as a lot of hot air it means nothing.

If you make an offer and it is accepted they will ask for a 'booking deposit' maybe €5,000 or €10,000. This is referred to as the Sale Agreed stage. And guess what, it still means nothing. You can say, 'changed my mind give back the deposit' and they will have to give it back. Equally they can say, 'changed our mind, dont want to sell, here is your deposit back'. Now in fairness if a house reaches the Sale Agreed stage it usually goes through, but not always and there is no legal obligation on either side.

Next comes the exchange of contracts, the seller will send your solicitor a contract. Your solicitor will explain exactly what is involved, while sometimes it is a simple as you buy the house, there may be other issues involved, is it Freehold or Leasehold ? When you are happy you sign the contract and pay the final deposit. Once your signed contract goes back to the seller then you are committed to buy the house.

This is my understanding of the process.

 

[Boyd]

I can't tell what "We'" means in your message but unless it's your wife/husband, one oft forgotten thing is an escape clause. Relationships break down, if you're not married, you should agreed in writing with solicitor who owns what percentage in the house, especially if one or other is putting in more money. Not trying to be negative but it's a practical concern (just look at the "Issues arising from joint mortgages forum).

 

[new_one2020]

This is a very good guide.

Buying a home - step by step - CCPC

We have put together a step by step guide that will help guide you through the whole process.

www.ccpc.ie

mf

Thanks! This seems great, haven't seen this page before and the steps are really described in an easy way!

Well you are off to the best start in your new home search.

There are lots of threads in relation to mortgages on AskAboutMoney, so have a read through those (some of which are here). A lot of the posters have gone through a purchase in recent times so will be able to assist with specific questions that you may have, but for the moment, what @mf1 posted is an ideal start.

and welcome to AskAboutMoney !

Thank you! I'm trying to do as much research as possible before anything gets started, but sometimes it isn't easy to find answers to very specific things I might not understand. I'll go through the other threads.

My response.

Mortgage. You can and probably should apply early in the process, before you have selected your house. You can get 'approval in principal' that means the bank will lend you a certain amount based on your income. They will still want to see reports on the actual house you want to buy. A broker is probably a good idea if you feel unsure of the process, but not really necessary, they do not cost you anything (probably).

Solicitor. Strictly speaking you do not need a solicitor, but it would be very unwise not to have one. You simply contact some solicitors and pick the one you like. No one will assign you one. While some solicitors do overcharge, a good service, someone who does lots of house purchases and responds quickly is important, do not over fixate on the cost. Again get one early, rather than late in the process.

The above steps are fairly straightforward.

Buying/bidding. This is where the 'unspoken details of buying a house here' really start. With new builds it can usually be staightforward, they tell you the price, if you are happy you agree to pay it. With secondhand homes and less often with new builds the haggling over the price can resemble a street market. Both you and they can say anything and it has no consequence, 'the asking price is €300k', 'OK I will pay €300k', 'actually we want €350k' or equally you can say 'we will offer €400k" they accept then you can say ' we have had a rethink we will only pay €380k'. In my opinion the only way to look at this stage is as a lot of hot air it means nothing.

If you make an offer and it is accepted they will ask for a 'booking deposit' maybe €5,000 or €10,000. This is referred to as the Sale Agreed stage. And guess what, it still means nothing. You can say, 'changed my mind give back the deposit' and they will have to give it back. Equally they can say, 'changed our mind, dont want to sell, here is your deposit back'. Now in fairness if a house reaches the Sale Agreed stage it usually goes through, but not always and there is no legal obligation on either side.

Next comes the exchange of contracts, the seller will send your solicitor a contract. Your solicitor will explain exactly what is involved, while sometimes it is a simple as you buy the house, there may be other issues involved, is it Freehold or Leasehold ? When you are happy you sign the contract and pay the final deposit. Once your signed contract goes back to the seller then you are committed to buy the house.

This is my understanding of the process.

Thank you, your reply gives great insight for me and is exactly what I was looking for - especially the buying/bidding part which seems to be really crazy!

I can't tell what "We'" means in your message but unless it's your wife/husband, one oft forgotten thing is an escape clause. Relationships break down, if you're not married, you should agreed in writing with solicitor who owns what percentage in the house, especially if one or other is putting in more money. Not trying to be negative but it's a practical concern (just look at the "Issues arising from joint mortgages forum).

Thanks for your concern! This is all planned actually, we're not married yet but we will have our assets split accordingly.