Making Cents with Liam Croke: First time buyers should take care over compromises

Liam Croke

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Liam Croke

Making Cents with Liam Croke First time buyers: take care over compromises

First time buyers might not get the dream home straight away, but they shouldn't make too many compromises on that first property

I received a lot of emails following last week’s article, particularly from first time buyers, so I’m going to continue with that theme this week, with a slight change of direction.

What you should be on the look-out for when viewing a property? If you have your finance in place your next step is making sure the property you are interested in ticks all, or as many boxes as you want in a house.

Putting a list together, and writing down your parameters for any property, would be a good use of your time. Without doubt, there are likely to be trade-offs, because you may not satisfy everything on your list, but there must be some red lines on which you are not willing to compromise.

If you are pre-approved for €250,000 and have €25,000 as your 10% deposit, it may not be enough to allow you buy a five-bed detached property in an area you would love to live, but that doesn’t mean you should compromise on what you will accept - you may regret it.

I came across an interesting study recently, which revealed that the top four regrets of first-time buyers were:

1. 40% regret the cost of a property

2. 28% wish they had quieter neighbours and better schools nearby

3. 24% regretted the size of the outside area, whether they wanted more space or less maintenance.

4. 17% wish they had more parking space

First time buyers sometimes compromise because they see the property as their starter home only and that their next one will fulfil their requirements.

This can be a big mistake; don’t sacrifice too much in what you want from a property. Think long term: you could be in this property for the next 10 years. You may not, but you need a Plan B in case things don’t go your way.

There is a saying that the three most important considerations when buying a property are location, location, location. Whoever came up with it isn’t far off the mark, because where you live has a big impact on your quality of life.

What’s the neighbourhood like? How well maintained is the next-door neighbour’s house? That might give you a sense of what they are like themselves.

A lot of people view a property in the middle of the day, but you should view it early in the morning and late at night also. By doing this, it will give you a better sense of what the area is like. Is it noisy? Are there many families? What’s parking like? Does it feel safe

Whether you buy a new house or a fixer-upper is important as well.

Yes, a fixer-upper might cost less than a new home, but it could be a money sink-hole as well, where you end up spending a lot more replacing windows, kitchens, roofs etc.

So it’s really a case of buyer beware and not being blindsided by a low asking price. You must know how much it is likely to cost you to get it to the condition you want. The next question is: how are you going to fund that? Through your mortgage? Will the bank give you the money? Will it add value to the property? Lots of questions you need to explore and find the answers to before you commit to anything.

When viewing a property, pay attention to little things. Do the floors creak? Does the floor slant? Are there cracks on the walls or have they tried to cover them up? These could be tell-tale signs of worse problems to come which you have to spend a ton of money to rectify. Getting the house inspected by a professional is a must.

I was in the process of buying a property recently and had a deposit paid and was ready to sign contracts, but before I did, I got an engineer friend of mine to look at it and boy was I glad I did. He noticed things I never could, like when he went up into the attic, when he looked at the walls, what he noticed on floorboards, on sliding doors, cracks on the outside walls. He even looked at the house next door and saw things he wasn’t happy with. Without him and his advice I would have certainly missed them, and, it could have ended up being a costly mistake on my part.

Get a structural survey carried out, even if the property looks incredible and even if it is relatively new.

If flaws are uncovered, it doesn’t mean you have to walk away either, just put a price on what it would take to rectify anything that needs to be repaid or replaced, and factor that into your numbers and your decision making.

I was told by a real estate friend of mine recently, that it’s very easy to make a dump of a house look great by dressing it up with cheap furniture, flowers, paintings and so on. There are many simple tricks which can hide the imperfections of a property like if there is more furniture in a room than needs to be there. Are they trying to hide something? They can be small things really, but they might matter to you.

Liam Croke is MD of Harmonics Financial Ltd,

based in Plassey. He can be contacted at liam@harmonics.ie or www.harmonics.ie