Buying a house in Ireland right now is, without a doubt, very difficult. High demand and fierce competition paired with a stagnant housing supply results in high prices, bidding wars, and long queues for in-person tours.
For first-time homebuyers in Cork or elsewhere in Ireland, careful planning is a must if you want to get a head start on the competition. Knowing what to expect in the house buying process in Ireland can save you time, money, and headaches, which is why we’ve put together this list of the key steps to buying a house in Ireland. As consulting engineers based in Cork, we hope that every prospective homeowner is armed and ready with these helpful tips.
Work Out What You Can Actually Afford
The first and perhaps one of the most important steps to buying a house in Ireland is to purchase within your means. Be reasonable with yourself and your expectations and be realistic. Of course, finances are closely linked with the location of the property, so it’s also a good idea to make some basic decisions about locations here.
Assuming you will purchase with a mortgage loan, work out how much your monthly repayments will be, and don’t forget to account for additional maintenance and repair costs. Most buyers eligible for a mortgage loan can expect around 3.5x their gross annual income from Irish banks, but a 10% deposit is typically required. E.g. for a house costing €350,000, the buyer must pay €35,000 (10%) up front.
If you’re a first-time homebuyer, consider the Help to Buy scheme and/or First Home Scheme. If you meet the eligibility criteria, you could save tens of thousands of euros.
You should also try to remember that any time you see a listed selling price, add on a few % to account for additional and necessary costs, such as solicitor fees, Stamp Duty, property valuation fees, and moving costs. It varies, but usually, it’s a few thousand euros you must have ready in addition to the purchase price.
Get Mortgage Approval in Principle
Working out the “napkin maths” of home purchase costs in Ireland is a good start, and it’s enough to fidget around with mortgage rates and terms. Once you’ve narrowed down your budget a little more and perhaps have started viewing some properties, you should start to be a little more specific with mortgage calculators (most major banks have free online mortgage calculators) and applying for an Approval in Principle (AIP).
An AIP is a lender’s preliminary indicator, telling you how much they’re willing to lend. It’ll remain valid for about six months and can help you stick within a realistic budget. Estate agents take them more seriously, putting you in a better position when making offers. You typically need to show documentation including payslips, bank statements, proof of deposit, and employment details to request mortgage approval.
Lastly, banks and other financial institutions are mortgage lenders, and they do offer different rates and terms, so it’s worth shopping around.
Find Your Property
Surely as a homebuyer, you’re already using (or should be using) Daft or MyHome to find your ideal property. But are you tapping into local knowledge and expertise? Local estate agents can give you a much better impression of a particular neighbourhood’s market dynamics, realistic selling prices, and potential.
Furthermore, are you certain that the selling price is within reason for a particular home? The Property Price Register can give you exact historical data on how much your desired home, and/or those within the area, have sold for.
Keep in mind that homes sold in Ireland must have a Building Energy Rating (BER). Energy efficiency is quite valuable nowadays, so higher BER-rated properties may be more desirable.
Don’t neglect the costs of remodelling and renovation, either. Old homes may sometimes be quite cheap, but you could be looking at tens (or even hundreds) of thousands of euros to make the home habitable.
Make an Offer
Once you’ve narrowed down a desirable home in a desirable location at a reasonable listed price, and ideally with a mortgage Approval in Principle, you’re well-prepared to start making offers.
But before you come out guns blazing, keep in mind that in Ireland, offers are not legally binding until contracts are signed. Buyers can withdraw at any point, for any reason, before the contract is signed.
Set a price ceiling and stick firm to it, but on the other hand, be willing to negotiate fairly with the seller. Remember that the home’s selling price takes into account the visible, stated condition of the home. We’ll touch on this more in our next point, and it’s important because the way a house looks doesn’t always reflect the actual condition!
Once the seller agrees to an offer, you’ll have to pay a booking deposit to your estate agent to secure the sale. This can be refunded up until the signing of the contract. Inform your solicitor at this stage.
Commission a Pre-Purchase Survey
The three biggest factors in the price of a home in Ireland are location, location, and location. Assuming you’ve followed the above steps, you already have that secured. Now, when it comes to assessing the value of a home, one of the biggest mistakes to avoid is to assume that a house’s stated condition (reflected in the price and the mortgage valuation) is the same as its actual condition (not necessarily reflected in the price).
In Ireland, caveat emptor “buyer beware” is the norm in real estate. Legally, the buyer is responsible for the home, including remediating any faults or defects which could have been inherited from the seller. Given that some repairs (e.g. roofing, framing, or even foundations) can easily cost tens of thousands of euros, and many of these faults may be invisible to the naked eye, how can you avoid being stung by a slew of costly repairs on your new home?
The answer is quite simple: Pre-Purchase Surveys from qualified surveyors and engineers. These surveys differ from mortgage valuations because they look at the actual conditions of a property and all of its elements, e.g. dampness, mould, rot, structural stability, roofing, plumbing/electrical/HVAC, presence of unauthorised modifications, and much more.
Thousands upon thousands of homes in Ireland, especially older homes, are full of faults and defects. Many may be cosmetic or simple home improvement projects, others may be extremely costly and necessary for safety and to bring the home into compliance with Irish standards and local council authorities.
The pre-purchase survey allows homebuyers to negotiate a fairer price with the seller, request that works take place as a condition of the purchase, or simply to walk away from a bad deal altogether. These surveys cost very little compared to the potential cost of repairs, not to mention the headaches or even the health hazards that could be present in the home.
These surveys are for second-hand homes, but if you’re buying a new build, you should consider retaining a Snag List Inspection instead.
The Legal Process of Buying a Home
This particular step can appear daunting to a first-time homebuyer in Ireland, but it doesn’t need to be. A solicitor is necessary when buying (or selling) a home in Ireland, and they’ll look after the essentials, but they are also quite helpful in various stages of the transaction (conveyancing) process.
Firstly, your solicitor will help you review the sale contract, conduct title searches, and can identify any legal issues with the property (e.g. covenants). In other words, they’ll make sure everything’s good to go.
Your 10% deposit is due when signing the contract with the seller. The contract, once signed, is legally binding and it formalises the sale. Your solicitor will then finalise the process by going through the closing process, doing title checks, transferring funds, and helping with mortgage drawdown. On closing day, you receive the keys to your new home and the funds are transferred.
Getting the Keys
With keys in hand, the property is now yours and it’s certainly an appropriate time to celebrate and to organise a housewarming party! Before getting too carried away, however, try to get a few things done after moving in, and the sooner, the better.
First, make sure that you change the locks and have new keys cut. Set up accounts with local utilities (water, gas, electric), internet provider, and home insurance. Change your registered address with Revenue, your bank, electoral register, and notify others of your new address. Make sure to register for Local Property Tax, too.
Buy Your Home with Confidence and Peace of Mind
While looking for a new home in Ireland can be quite exciting and definitely stressful, it doesn’t need to come with the added stress of moving into a home riddled with costly repairs that now fall on your shoulders.
Buying a home isn’t something we do every day; it’s one of the single biggest financial decisions of our lives. Following the steps to buying a house in Ireland gives you a head start, while retaining a pre-purchase survey or snag list gives you confidence and peace of mind that the property’s listed price fairly represents its actual condition. BCE Consulting Engineers can assist with professional pre-purchase surveys and snag lists before contracts are signed, empowering homebuyers in Ireland.
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