Buyer's guide to new homes
Published 18/10/2015 | 02:30
Buying a home is the single biggest purchase of most people's lives. They may think they'll do it only once but, according to UK research, people typically move three times in their life.
But getting on that first rung of the ladder is the hardest and while lending is finally picking up among banks, it remains difficult to get started. New homes are being built all over the country, but many are being snapped up off plan as the pent-up demand from the last few years plays out.
Gordon Lennox of Sherry FitzGerald says there are a number of things you can do to make sure you are successful in securing a new home. The first is to realise that there are two types of developments under construction right now: those ordered by Nama, and those being privately built. You won't be able to tell the difference, but Nama brings with it, not unreasonably, more paperwork, hoops for builders to jump through and boxes to tick before you can sign on the dotted line.
"If you're dealing with builders outside Nama, it's definitely quicker and easier," says Gordon. "Developers reporting to Nama have to persuade them that buyers putting down deposits have the money behind them to complete the deal."
The first step then, is to get Approval in Principle or AIP (see sidebar). "If you come to the launch or viewing with AIP then it's evidence of loan approval. Whether seven or 70 potential buyers turn up, AIPs get priority. It's 'show me the money' time".
Your new home checklist should include some preparatory homework. "Shortlist location based on schools, work or family - plan it," advises Gordon. Michelle Fagan of FKL Architects adds that you should consider garden aspect carefully. "If the proportion is say 5m x 11m, have a look at maximising light based on when you're going to be in the house. If you're there all day, then an east/west aspect is best. South facing is fine, but in Ireland the sun moves completely around during the day and might be gone by the time you want to have a barbecue in the evening. Check for trees over shadowing your garden also."
New homes are often sold in phases. The first is normally cheapest, however Michelle says that this may not necessarily be the best option. "If you have kids, or don't want to live on a building site for a few years, you might be better off waiting until later, even if it's more expensive." Check out the builder's track record. How were previous sites left finished? Were roads and landscaping done properly?
The procedure then is to pay a refundable deposit, normally €5,000 to €10,000. Many builders will now take cards or electronic fund transfer rather than insist on a bank draft. This deposit fixes the price, so that the builder cannot later return and increase it.
The second stage is the signing of a contract which the builder's solicitor sends to the buyer's solicitor. This normally has to be returned within 10 to 21 days with a further 10pc deposit payment - this time non-refundable.
Finally, you may need to wait for the build to complete before paying the balance. Gordon Lennox says that with a "shell" structure this can take 8 to 12 weeks; "If it's a hole in the ground, several months", especially if the weather is inclement. The balance is payable on completion giving you time to sort out bank requirements.
Before that, you'll be asked to present a "snag list". This isn't a litany of things wrong with the house, but an opportunity to touch base with the builder on minor issues that you don't want to quarrel about later.
It is worth spending time on this and perhaps engaging a professional if you wish. Although errors can be rectified at any stage, it's obviously preferable to bring these up before you pay out the biggest cheque of your life. An architect's report will cost €250-500, says Michelle Fagan and includes checking insulation, pipes and plumbing, finishes, workmanship and lets you present your builder with works outstanding.
How to survive the move
1 Use a mortgage broker You will never understand the minefield that is a mortgage application. A €500 or so spend up-front takes away most of the pain. They can also search for the best mortgage, which may not be with your own bank.
2 Use a moving firm Whether it's from a poky flat or mum's spare room, you cannot DIY it in the back of your Fiesta. We accumulate a lifetime of stuff in a few years and you will need help to get it from one place to another. Use the opportunity to downsize and clear out. Label boxes clearly with contents so movers can place into appropriate rooms.
3 Know the associated costs Surveyor, life insurance, house insurance, legal fees all have to be budgeted for.
4 Have a moving strategy Can someone mind your pets, kids or vacant house on the big day? Is all your insurance in place? Can you time the moves to coincide? Is someone moving into your old place on the same day? Work it all out.
5 Don't come to blows Moving house is one of the most stressful times in your life. In your mind, you're imagining celebrating with a glass of prosecco in your new kitchen as the sun sets on moving day; in reality you could be plugging a leak, crying to your solicitor or standing outside with no keys screaming at your partner. Plan for the unexpected.