Carmel tells her story in this thread. I have discussed some of the issues involved in Buy now or rent now and buy later? - Brendan
Brendan asked me to outline our experiences trading up so here goes.....
Selling:
Two years ago this month, we put our 3 bed semi in West Dublin up for sale. We had bought it in 2004 planning to stay in it for 5 years. By 2010 we had two kids and needed more space. We wanted to settle in an area closer to our work and with good schools. A similar house in our estate had gone sale agreed very quickly and the estate agent convinced us that he had a number of interested parties. We had been through the option of keeping the house and renting it, but the figures didn't add up if we wanted to have a deposit for a new house, so we decided to put it up for sale.
A year later, we went sale agreed, having accepted an offer 20K lower than the first we had received. But we knew that the offers weren't going to get any higher, and we were also certain that we didn't want to stay living in the area that we were in. Also we still had some equity in the house and wanted to sell while we still had that. The really agonising decision when selling was that we knew that we were going to lose our tracker (NIB, ECB plus 0.5%). Still coming to terms with that
Renting:
We had assumed that it would be easy enough to find a nice house to rent in the area that we were looking for a house. A friend of a friend had recently gone through the same thing and when I rang her looking for advice on renting she told me that it had taken her 9 weeks to find a rental property. At that stage we had 3 weeks to closing so we concentrated our efforts! We really wanted to rent an unfurnished house so that we wouldn't have to pay for storage and also to have our own things around us. Finding a decent unfurnished house to rent in South Dublin was quite difficult. We found that there was alot of competition and that we we ended up bidding for a rental house (he who is willing to pay the most rent wins). In the end, we offered the asking rent on a house and that was accepted.
We don't like renting. When you have had your own house with things the way that you like them, it is a big change. We had thought that it would take us max. 6 months to find a new house, but had to sign a lease for 12 months (that seems to be standard with most rentals). I had looked into the implications of leaving the lease early, and it looked like the most we would lose would be a month's deposit so we took that risk. (I won't go into the detail here, but in general I understand that if you get someone else to rent a property for the remainder of a lease then you are not liable for the rent.) In general its just very unsettling being in a temporary situation while you look for a house, we hadn't really thought about that beforehand.
But, on the positive side, we have been able to suss out the area that we are living in and get to know it. The plan was that I would get the bus to work and I've been able to test the commute and know that it works. We don't want to move again after we buy this house, so we are being quite picky. Because prices have been falling, we haven't been in any rush. At one stage during the year, prices were falling at 1.5% per month. On a 500K house that's €7500, so even taking rent into account that was reassuring.
Getting a mortgage:
When we first went to the bank to check out getting a mortgage, they told us that we could borrow a huge figure that we wouldn't dream of borrowing. We applied for approval for a figure that we were happy with. In order to get approval we had to pick a property for sale and put in a 'fake' application based on that. We want to buy a fixer upper. One issue we had to be careful with was to ensure that the LTV would be acceptable and still have money left over to do the fixing up as the LTV is based on the purchase value. I should probably point out that I'm a public servant and my other half works for a large multi-national so we think that we are a good bet to get a mortgage.
Buying a new house:
We've been looking for a house actively now for a year. We have a checklist which doesn't sound too demanding, but we've been struggling to find houses that match it within our budget. For example, we are looking for a south or west facing back garden and one friend kindly pointed out to me that that automatically rules out half of the houses on most roads. As we are looking for a fixer upper, we'll continue to rent for a couple of months after buying until the work gets done (another cost to consider). We are looking in South County Dublin and judging from the viewings, there are loads of people just like us with young kids looking to buy at the moment.
We got figures done up by a QS on the first house that we were interested in. That was a good idea because the work required was going to cost twice as much as we thought and we ended up backing away from that one. The next house we fell in love with was taken off the market (we found out later that a family member had agreed to buy it). At the moment we are bidding on a house and last week went back to the bank asking for approval to borrow an extra 20K because we really like this one. Still waiting for an answer on that. The house is one and a half times the size of our previous home in a great location for our work and schools etc. There is one counter bidder and we know our limit so we are currently waiting to hear if he is going to up his bid. Its nail biting and quite emotional and draining. Everytime a house comes up that you like, you imagine yourself living in it and there is a little bit of a grieving process when it doesn't work out. Fingers crossed...........
Update 26 June
Sale Agreed:
When I last posted we were bidding on a house that ticked all of the boxes for us and had gone back to the bank looking for an extra 20K on the amount that we previously had approval for. The bids had gotten very close to our limit when the other bidder pulled out. We really wanted this house as we've been looking for a year and very few houses in our price range ticked all of the boxes. The house is an executor sale and needs some work, but we're really happy with the location, orientation, layout and size. Everything that needs to be fixed can be (with money of course!). It'll probably take a couple of years before we have everything the way we want it, but we'll put up with that.
Our last bid was 6.5% below asking and was accepted. We got a mortgage offer from the bank today. In the meantime I discovered that we should get some mortgage interest relief for buying in 2012, so that was a nice surprise.
I have been putting together a list of purchase costs and this is it so far:
Stamp duty: 1% of purchase price
Renting while house is being renovated: we're allowing 3 months rent
Mortgage protection: The best value I can find is hello.ie. This is significantly cheaper than that offered by the bank
House insurance: I haven't gone looking for this yet, but looking at other posts I think that it might be hard to get insurance while the renovation works are being done if the house isn't occupied. I've had a look at some posts about this and looking into that is next on the list.
Solicitor fees including land registry: 2500 approx
Survey and valuation: 500e approx (not finalised yet)
One item that I am hoping isn't going to be an issue is a condition from the bank looking for evidence that our savings have been accumulated over a satisfactory of time and are not from a debt provider, other borrowings or lump sum (for example an accident claim). Following advice on askaboutmoney.com I have been a bit of a rate tart and have moved our savings around quite a bit to get the best interest rate. I didn't always keep a record when I closed down accounts, so I'm not sure what exactly the bank are looking for in relation to this condition and how far back they will want to go.
It will be interesting to see what the bank are like to deal with, will keep you posted.
Brendan asked me to outline our experiences trading up so here goes.....
Selling:
Two years ago this month, we put our 3 bed semi in West Dublin up for sale. We had bought it in 2004 planning to stay in it for 5 years. By 2010 we had two kids and needed more space. We wanted to settle in an area closer to our work and with good schools. A similar house in our estate had gone sale agreed very quickly and the estate agent convinced us that he had a number of interested parties. We had been through the option of keeping the house and renting it, but the figures didn't add up if we wanted to have a deposit for a new house, so we decided to put it up for sale.
A year later, we went sale agreed, having accepted an offer 20K lower than the first we had received. But we knew that the offers weren't going to get any higher, and we were also certain that we didn't want to stay living in the area that we were in. Also we still had some equity in the house and wanted to sell while we still had that. The really agonising decision when selling was that we knew that we were going to lose our tracker (NIB, ECB plus 0.5%). Still coming to terms with that
Renting:
We had assumed that it would be easy enough to find a nice house to rent in the area that we were looking for a house. A friend of a friend had recently gone through the same thing and when I rang her looking for advice on renting she told me that it had taken her 9 weeks to find a rental property. At that stage we had 3 weeks to closing so we concentrated our efforts! We really wanted to rent an unfurnished house so that we wouldn't have to pay for storage and also to have our own things around us. Finding a decent unfurnished house to rent in South Dublin was quite difficult. We found that there was alot of competition and that we we ended up bidding for a rental house (he who is willing to pay the most rent wins). In the end, we offered the asking rent on a house and that was accepted.
We don't like renting. When you have had your own house with things the way that you like them, it is a big change. We had thought that it would take us max. 6 months to find a new house, but had to sign a lease for 12 months (that seems to be standard with most rentals). I had looked into the implications of leaving the lease early, and it looked like the most we would lose would be a month's deposit so we took that risk. (I won't go into the detail here, but in general I understand that if you get someone else to rent a property for the remainder of a lease then you are not liable for the rent.) In general its just very unsettling being in a temporary situation while you look for a house, we hadn't really thought about that beforehand.
But, on the positive side, we have been able to suss out the area that we are living in and get to know it. The plan was that I would get the bus to work and I've been able to test the commute and know that it works. We don't want to move again after we buy this house, so we are being quite picky. Because prices have been falling, we haven't been in any rush. At one stage during the year, prices were falling at 1.5% per month. On a 500K house that's €7500, so even taking rent into account that was reassuring.
Getting a mortgage:
When we first went to the bank to check out getting a mortgage, they told us that we could borrow a huge figure that we wouldn't dream of borrowing. We applied for approval for a figure that we were happy with. In order to get approval we had to pick a property for sale and put in a 'fake' application based on that. We want to buy a fixer upper. One issue we had to be careful with was to ensure that the LTV would be acceptable and still have money left over to do the fixing up as the LTV is based on the purchase value. I should probably point out that I'm a public servant and my other half works for a large multi-national so we think that we are a good bet to get a mortgage.
Buying a new house:
We've been looking for a house actively now for a year. We have a checklist which doesn't sound too demanding, but we've been struggling to find houses that match it within our budget. For example, we are looking for a south or west facing back garden and one friend kindly pointed out to me that that automatically rules out half of the houses on most roads. As we are looking for a fixer upper, we'll continue to rent for a couple of months after buying until the work gets done (another cost to consider). We are looking in South County Dublin and judging from the viewings, there are loads of people just like us with young kids looking to buy at the moment.
We got figures done up by a QS on the first house that we were interested in. That was a good idea because the work required was going to cost twice as much as we thought and we ended up backing away from that one. The next house we fell in love with was taken off the market (we found out later that a family member had agreed to buy it). At the moment we are bidding on a house and last week went back to the bank asking for approval to borrow an extra 20K because we really like this one. Still waiting for an answer on that. The house is one and a half times the size of our previous home in a great location for our work and schools etc. There is one counter bidder and we know our limit so we are currently waiting to hear if he is going to up his bid. Its nail biting and quite emotional and draining. Everytime a house comes up that you like, you imagine yourself living in it and there is a little bit of a grieving process when it doesn't work out. Fingers crossed...........
Update 26 June
Sale Agreed:
When I last posted we were bidding on a house that ticked all of the boxes for us and had gone back to the bank looking for an extra 20K on the amount that we previously had approval for. The bids had gotten very close to our limit when the other bidder pulled out. We really wanted this house as we've been looking for a year and very few houses in our price range ticked all of the boxes. The house is an executor sale and needs some work, but we're really happy with the location, orientation, layout and size. Everything that needs to be fixed can be (with money of course!). It'll probably take a couple of years before we have everything the way we want it, but we'll put up with that.
Our last bid was 6.5% below asking and was accepted. We got a mortgage offer from the bank today. In the meantime I discovered that we should get some mortgage interest relief for buying in 2012, so that was a nice surprise.
I have been putting together a list of purchase costs and this is it so far:
Stamp duty: 1% of purchase price
Renting while house is being renovated: we're allowing 3 months rent
Mortgage protection: The best value I can find is hello.ie. This is significantly cheaper than that offered by the bank
House insurance: I haven't gone looking for this yet, but looking at other posts I think that it might be hard to get insurance while the renovation works are being done if the house isn't occupied. I've had a look at some posts about this and looking into that is next on the list.
Solicitor fees including land registry: 2500 approx
Survey and valuation: 500e approx (not finalised yet)
One item that I am hoping isn't going to be an issue is a condition from the bank looking for evidence that our savings have been accumulated over a satisfactory of time and are not from a debt provider, other borrowings or lump sum (for example an accident claim). Following advice on askaboutmoney.com
I have been a bit of a rate tart and have moved our savings around quite a bit to get the best interest rate. I didn't always keep a record when I closed down accounts, so I'm not sure what exactly the bank are looking for in relation to this condition and how far back they will want to go. It will be interesting to see what the bank are like to deal with, will keep you posted.
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