What value houses should I be looking at?

S

Starting Out

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Hello all,

I am planning to enter the property market at the moment and am trying to understand where my price range is at. The maximum I can borrow from the banks would be €300k (92% LTV) so an implied house price of ~ €325k.

I know every house on the market is getting bids in for lower than their advertised amounts but I've no real idea about the scale of the reductions. I'm struggling to understand the prices that I should be limiting myself to when looking through property pages of the press or online. Should I be looking at houses with "valuations" of €370k, €350k???

I am not restricted to a new build or second hand home but would be limited to houses in the Dublin area. Has anyone any reliable advice on how much of a mark-up I should be anticipating in the advertised prices? I presume there is a difference in the mark-ups on new builds Vs second hand.

Obviously I understand there can't be sweeping generalisations but would like to get some feedback on what some market participants are aware of at the moment.

All help appreciated.

Starting Out.
 
The first thing you should do is create a wish list -
  • decide on what location suits you best both now and for the future(i.e. if you were to change jobs)
  • What type of house do you want - think of the long term. A townhouse might be fine now but if you have kids with bikes you don't want them tearing through the house all the time.
As everyone knows, they are a lot of houses out there at the moment so if you narrow it down to what you really want and see what prices they are asking. Also remember you don't have to spend what the bank is offering.
Sorry I don't know about what % under the asking price houses are selling for but I would think it depends on how realistic the asking price was and the sellor's situation.

If you are a first time buyer, try to get as high up the property ladder as possible as it gets very expensive with stamp duty etc after your first time. Also may not be possible for a while if you get into negitive equality
 
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Starting Out said:
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Should I be looking at houses with "valuations" of €370k, €350k???
Click to expand...

Why not, some people are desperate to sell so no issue about making an offer within your budget. Each home will be a very different scenario but even in this climate beware any bargains from builders and rock bottom private sales.

Just on the sensible side its a rental heaven at the moment until house prices stabilise so you might want to wait awhile so you do not go straight into negative equity. Another point is that you do not have to use the maximum amount to buy a home so if you find a home for 250k happy days your re-payments will be less.

Good luck
 
if you are in a position to rent do so...(roll over 3-6 month lease)

wait until house prices stabilise and then you'll have relative peace of mind...

just be SURE your offer letter doesnt go "stale"...an offer letter can be withdrawn by the banks at any time prior to purchase & in this climate just make sure its sound

i bought an apartment 5 months back and am happy in it but the negative equity thing is a bit daunting...they are still selling my ones at the price i got it for though (i got a reduction upon signing) its the usual "hindsight" thing though...i would have rented had i known this was goin to happen...but sure...
 
You should not base a decision on what the bank will lend to you. You should base what you borrow on what you can comfortably afford to repay.

There are implications to what a bank will lend you if you decide to buy an apartment or a house.

The amount of money you have saved is an important consideration as it will dictate whether you can buy a place that needs some work or need to find a place that will throw in the furniture for free as you only have the deposit and fees saved.

Regarding the price of a house, you are right that there is no generalisation. The good thing about the current market is that there is no need to panic, you can offer what the house is worth to you.
 
Thanks for the suggestions to date. I'm comfortable with the financing side of things in terms of what the banks have offered and in terms of repayments etc.

What I'm really trying to see is what all my property options are now. I don't want to limit myself to a maximum purchase price thinking some particular house is out of my reach when in the current climate this may not actually be the case.

Any more thoughts?
 
No harm in offering what you can afford for the house you want. All the vendors can say is no and with the market as it is you aren't going to lose out on other houses.
 
Starting Out said:
Thanks for the suggestions to date. I'm comfortable with the financing side of things in terms of what the banks have offered and in terms of repayments etc.

What I'm really trying to see is what all my property options are now. I don't want to limit myself to a maximum purchase price thinking some particular house is out of my reach when in the current climate this may not actually be the case.

Any more thoughts?
Click to expand...

I don't think there is any blanket advice that can be given such automatically only offer < 10% below the asking price or <20% below asking.
Some properties are offered to the market with competitive asking prices by comparison to similar properties and the price may attempt to take the current market situation into account. On the other hand, there are plenty of houses not realistically priced.
So I think the best thing is to look at a range asking a bit above your asking price.
 
I think if you are patient you could look at properties up to €400k and secure them at €325k.

As long as you know how long the property has been on the market and whether it has dropped the price you should be in a strong position.
 
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