1. Set up a budget. Look at all the expenses, such as stamp duty, land registry fees, insurance and the cost of a surveyor. Examine the cost of commuting and upgrades. It is essential prior to going house hunting that you know what your budget is.
2. Learn about the neighbourhood demographics. If you are buying a house in a neighbourhood full of renters, it only takes a few bad renters or bad landlords to drag the neighbourhood down fast. If the neighbourhood is full of single people, will you be happy there if you have very young children? Research the area in which you intend to purchase. If possible, speak to other home owners in the area. A good idea is to rent a property in the area prior to purchasing, perhaps while you are saving for your deposit. A good neighbour and a good neighbourhood is a treasure.
3. Save for your deposit. Most lending institutions will allow purchasers to borrow 80% of the purchase price. Gone are the days of 100% mortgages.
4. Consult a mortgage intermediary. The mortgage intermediary will best compare the various interest rates, the term of the loan being offered and the conditions attaching to the loan. It is vital that you submit all of your paperwork to your lending institution and make an application for mortgage approval in principle. This will let you know how much a lending institution will loan you based on your income and your current level of existing debt. Do not end up house poor. Some house buyers fall in love with a house or a neighbourhood. This can lead to regret when the novelty wears off and you do not have any money to do the things you like. Try living on a pretend mortgage payment for six months and see how it goes.
5. Ensure you obtain life cover. All mortgage providers require a purchaser to put a mortgage protection policy in place. If you have had a medical procedure or recent illness, the life assurance company may require a medical certificate or a medical examination to be carried out. This can take time so allow for a delay in the issue of loan approval.
6. Ensure that you read the contract for sale before you sign it. It sounds obvious but you would be surprised at the amount of people that do not. A house is probably the largest purchase you will ever make in your life so make sure you read the terms of your contract. Your solicitor will explain the terms clearly to you. Ask lots of questions. He or she is there to help and address all of your queries. You should be certain of every aspect of the purchase.
7. Instruct a competent engineer or architect to carry out a structural survey of the property to identify any structural defects and ensure any alterations or additions to the property comply with planning permission and building regulations. Lending institutions do instruct valuers to value the property, but this is not a survey on the condition of the property and is sometimes referred to as a “drive-by valuation”. There may be many things wrong with the property that you cannot see. It may be crucial to your budget if there is work to be carried out on the property, and even if it is not immediate, it may affect your resale value.
8. Always make an appointment the day before the closing of the transaction with your auctioneer to inspect the property again. Unfortunately, some previous owners leave more than the celebratory bottle of wine for the new owner. Nothing takes the smile off as quick as a lot of rubbish in the house. The closing can be delayed until such time as the vendor clears the property in full.
9. Ensure that you know the identity of your solicitor when you start bidding. When you go to bid on a property, you want the vendor to know how serious you are. Your deposit and solicitor’s details should be ready to hand over to the auctioneer as soon as you have been told that the sale has been agreed. This will also reduce the risk of gazumping. A good and reputable solicitor is extremely important when you are purchasing. It could mean the difference of the sale going through with ease or you losing the property completely.
10. Know what is included in the sale prior to bidding. Do not put an offer on a property without knowing what you are buying. If there are items in the house you want, ask if they are to be included and if not, the vendor may sell them to you separately. On the other hand, if you want the property completely cleared when you get your keys, tell your solicitor and he or she can arrange for it to be a condition of sale in the contract.
Buying a new home can be stressful and time consuming. Think of it differently. It can be a very exciting time in your life and you will always remember buying your first home. Just strive to ensure that you have fond memories of the transaction by being organised and instructing a reputable solicitor and surveyor.
Karen Walsh, specialises in conveyancing and is a solicitor practicing in Walsh & Partners, Solicitors and Commissioners for Oaths, 17, South Mall, Cork.
Disclaimer: While every care is taken to ensure accuracy of information contained in this article, Solicitor Karen Walsh does not accept responsibility for errors or omissions howsoever arising, and you should seek legal advice in relation to your particular circumstances at the earliest possible time.