Thinking of buying a house in Ireland, but don’t know where to start? Don’t panic, our 5 key steps to Buying a House will put you on the right path.
If you are buying from Ireland or from abroad the steps are exactly the same, but can look pretty intimidating to the uninitiated, that’s why we created this Buying a House in Ireland guide.
In reality though if you follow these steps, the process is pretty straightforward and could see you securing your dream home in less than 6 months!
5 Key Steps to Buying a House in Ireland
So here’s a quick run down of the key steps to buying a house in Ireland.
- Getting Your Finance in Place
- Searching for a House to Buy
- Viewing Houses to Buy
- Making an Offer on a House
- Closing Your House Purchase
1. Financing House Buying in Ireland
Unless you are super lucky, it’s unlikely you will be buying a house in Ireland in cash which means you will need a mortgage. This will set your buying budget and can take a while to put in place, so it’s best to get the ball rolling before you start even looking at properties.
If you are a First Time Buyer you will need to put down at least 10% of the purchase price when you buy, you can do this from your savings or if you are buying a new build home using government grants.
There are two main grant schemes for First Time Buyers, the Help to Buy Scheme and the First Home Scheme. The Help to Buy scheme allows you to claim up to 10% of the purchase price of the house you are buying as a tax refund and the First Home Scheme can add up to an extra 30% by allowing the government to take a stake in the purchase.
These schemes can really boost your deposit and therefore your buying power, but they are only available to First Time Buyers buying newly built homes.
You then need to finance the remaining cost of the property with a mortgage from one of the Irish mortgage lenders. These lenders will look for proof of your ability to repay the loan by analysing your bank account before giving you what’s known as ‘Approval In Principle’.
So it’s really important when buying a house in Ireland that you can show you are saving or paying a rent larger than your mortgage repayment will be for the six months before applying for your mortgage.
How much you will be able to borrow, how much you will have to repay each month and even your chances of approval at all varies widely by lender. That’s why it’s best to get a mortgage broker who works with all the lenders, can recommend the best one for you and help you with the paperwork.
Most of the larger online brokers are free to use, so getting a mortgage broker can really help take the pain out of the financial part of buying and give you a much better idea of your buying budget. You can calculate how much you might be able to borrow here, but remember to leave money aside for costs like your solicitor, surveyor and valuer.
2. Searching for a House to Buy
When you are buying a house in Ireland it’s all about location, location, location. Think about your must haves and nice to haves for where you want to live to narrow down the area of your search.
Once you have your areas picked and your buying budget from your mortgage broker it’s time to hit the property search engines. The big two are DAFT.ie and myhome.ie [1] and if you use these to find out what property is available you will have access to 99% of all the properties listed in Ireland.
It’s worth putting the effort in to set your search engine up right, so register for an account to access email alerts and the full range of filters.
You don’t want to miss that dream home just because you only dip in and out when you are on the daily commute.
3. Viewing Houses to Buy
Before you start viewing you will need to secure your Approval In Principal (AIP) from your mortgage broker. When you are buying a house in Ireland selling agents often ask for the AIP to help them weed out the tyre kickers from the serious house hunters.
If you haven’t got your AIP yet, don’t worry you can get an instant online provisional AIP here.
Once you have got your viewing here’s a few things you might want to look out for.
- Orientation – Is the garden facing North (dark) or South (sunny)
- Storage – Are you likely to run out of space?
- Area – Once you’ve finished viewing, have a good mooch around the area.
While you have the agent agent, it’s best to make good use of them to dig a little deeper on the original listing. Here’s some smart questions that you might want to ask.
- How long has the property been on the market?
- Are there any current offers?
- Why are the sellers selling?
- Is there any planning permission on the home?
- Have the sellers made any structural changes?
- What year was the property built?
If you are interested in the house the first 3 questions will help you when you are making the offer and the last three will help avoid any nasty surprises when you are closing the purchase.
4. Making an Offer on a House
When your buying a house in Ireland the seller will often favour bids from buyers who already have their AIP in place when deciding which bids to accept, so make sure you have got a full Approval In Principal from your broker before you bid then find out if there are any current offers on the house you want to buy from the estate agent.
Once you have your ducks in a row don’t be shy in placing a bid, things can move very quickly in some house sales if buyers are happy to accept the asking price.
Although you may have your heart set on a house, make sure you don’t go beyond your budget, have a limit and stick to it.
The lenders are unlikely to go beyond their AIP amount and will also get an independent valuation of the house, so don’t be afraid of bowing out of the sale if you can’t make the numbers work.
5. Closing Your House Purchase
Once your bid is accepted and you have sent your booking deposit to the estate agent you will need to engage a solicitor, to help you review the purchase paperwork and draft the final purchase contracts, you should budget around €3,000 for this in total.
You should look for a solicitor who specialises in conveyancing, solicitors who do conveyancing on the side tend to cost more in both time and money. You can find an online conveyancer here.
Your broker will ask you to arrange an independent valuation of the property, mortgage protection and building insurance so the lender can release the remaining funds to you to complete the purchase.
It’s also worth getting a surveyor to give the house a once over at this stage for added piece of mind.
Once the funds are in place, you can exchange contracts with the seller. It’s only at this point that the sale is secure and the sellers can no longer pull out and you can finally look forward to moving into your new home!
In a Nutshell – Buying a House in Ireland
Although intimidating, buying a house in ireland isn’t actually that complicated.
The key steps are,
- Getting Your Finance in Place
- Searching for a House to Buy
- Viewing Houses to Buy
- Making an Offer on a House
- Closing Your House Purchase
A good mortgage broker will not only help you secure the mortgage, but also deal with the estate agent, solicitors and insurance. Making sure you pick the right mortgage broker for your purchase is key then, you can find out more about what makes a good mortgage broker here or get free mortgage advice from moneysherpa’s brokers here.
