First Time Buyer's Guide

The safest way to your new home

Buying your first home can involve a lot of stress. It’s a big step to take, but it can also be an exciting and rewarding time, which brings you to a new place in your life. Follow the guide below, plan ahead carefully and you can’t go far wrong. Remember, millions of people have been down this road before you. They made it OK and so will you, with a little help from your friends and professional advisors.

Step 1 - First find your price range
Buying your first new home is very exciting. In fact, it can be very easy to get caught up in the excitement of it all and find yourself agreeing to buy a new house that you just can’t afford. So, before you even go to see a house, find out how much you can afford to borrow.
The amount you can borrow will depend on a number of factors such as:

• your income
• any additional income such as regular overtime, bonus, commission etc.
• your deposit amount
• if you’re buying alone or with another person
• any other loans you may have outstanding

Step 2 - Allow for ALL the costs
Buying your first new home can cost you a lot more than just the price of the property. All those extra costs associated with buying a home can build up very quickly, so remember to leave money over after the purchase to pay for all these inevitable expenses:

Valuation Fee
A professional valuer has to assess the value of the property you wish to purchase to make sure that it is worth at least its asking price for mortgage purposes. A valuation can cost approximately €125 to €150.

Legal Fees
You will need a solicitor to make sure that that everything is legally in order for the house-buying process. Solicitor’s charges can vary considerably, so it’s worth speaking to two or three before you make your choice.
A solicitor should help you to do the following:

• Keep your costs down
• Ensure any ownership issues are sorted out (this is referred to as the ‘title’ of your house) so you don’t have legal problems and costs in the future
• Get the money to the bank on time during the closing process
• Guide you through the legal jargon

On top of your solicitor’s fee for doing all the necessary legal work, there will also be extra charges you should budget for. These include legal searches (at least €80), and registration of the title (which can be from €100 to over €850).

Stamp Duty
This is a government duty, which is charged on the market value (usually the purchase price) of a property. As a first time buyer of a new property, you don’t have to pay stamp duty if the floor space is less than or equal to 125 square metres (1,346 square feet) and you live in the property. For this, your builder will have to provide you with a Floor Area Certificate.
Stamp duty rules can be complicated so it’s best to check with your solicitor who will advise you.

Buildings Insurance
Buildings insurance will protect your home and provide you with the necessary funds to cover the costs of rebuilding or repairing your home in the event of incidents such as a fire, storm or flood. It is a requirement of your mortgage that this insurance is in place. The amount will depend on the size and the value of the property and the insurance company you choose.

Mortgage Protection and Life Assurance
Your home is probably one of the biggest investments you’ll ever make, so it is important to consider what would happen should you be unable to keep up your repayments. Mortgage Protection is a statutory requirement and can pay off your mortgage in the event of death or serious illness. It can provide a lump sum for your family or your partner should you die or develop a serious illness during the term of the policy.

Home making
Don’t forget to plan for the fun bits like furnishings, flooring, electrical appliances, cable TV, the house-warming party; or the not-so-fun bits like furniture removal, renovation and repairs. These will all have to be paid for, so make sure that you build all these considerations into your budget.

Step 3 – Financial Benefits
When you’re working out what you can afford, be realistic about how you can raise extra cash. You could rent out a room, but are you sure you want to share your new home? Think about it and be sure of how you want to proceed.

Mortgage Interest Relief
You can get tax relief on your monthly mortgage repayments. We will send you the relevant form on completion of your mortgage which you need to fill out and send to Revenue. This means that you will get a slight reduction on your monthly repayments. For more information check out our Tax Relief At Source leaflet and www.revenue.ie

Rent-a-Room Scheme
The Rent-A-Room Scheme allows you to rent a room in your home and earn up to €7,620 a year tax-free. This will not affect your mortgage interest relief entitlements in any way. For more information go to www.revenue.ie

Step 4 – Now find your new home
Get in touch with your local Real Estate Alliance Office. They are trained to help you find your new home. If you have to look in a new area, you will find another Real Estate Alliance Office nearby to help and advise you.
Deciding where to live is one of the most important things to consider. As the saying goes – “There are three things that matter when you’re buying a home. Location. Location. Location.” The location and amenities have to suit you and your lifestyle. So, before you start looking, decide what you need and what you want from your ideal location and list them in order of importance.
Things to think about:

• Is it easy to get to work? Is it on a bus route? If you’ve got a car can you drive there easily?
• Are you close to shops? Are they the kind of shops you like?
• If you have children, is there a school close by? Is a garden a must?
• What type of property do you want?
• Do you want a house or an apartment?
• How many bedrooms would you like? How many do you need?
• Do you need parking? Do you need a garage?

Step 5 – Pay your deposit
When you’ve found your ideal new home, you will pay a booking deposit. This is typically about €5,000. Then contracts will be sent to your solicitor who, after examining them to make sure it’s all correct, will ask you to sign them so they can be returned to the developer’s solicitor within 21 days. At this stage you must pay the balance of 8% / 10% of the purchase price depending on whether you are receiving a 90% or 92% mortgage. The balance of 10% of the purchase price is paid when the contracts are signed.
For example; if you get a 90% mortgage and the purchase price is €240,000, then you would pay €4,000 booking deposit and another €20,000 when signing the contract. This money will not be refunded. That’s why you have to make sure everything is order when you sign.

Step 6 – The Completion Notice
When the sale of your new home is completed, the developer’s solicitor sends your solicitor a Completion Notice. This gives you fourteen days to complete the purchase of your new home.
If you fail to complete the purchase within this period you may be charged interest.

Step 7 – Your Snag List
On receipt of the Completion Notice, the builder or your auctioneer will be in contact with you in relation to carrying out a snag list. The snag list (which is carried out by a Surveyor whom you employ directly) must be submitted in writing to the builder within 7 days after the completion notice has been served. One snag list only will be dealt with. This work is to be completed within 5 days of the builder receiving the list and must be re inspected by you within 7 days after completion.

Step 8 – The Final Inspection
Inform your bank/building society/broker and Solicitor that your new home is ready for “Final Inspection”, once your Solicitor receives the completion notice.
After receiving the final inspection from the valuer, your lending institution will forward your loan cheque to your solicitor. This generally takes five working days.

Step 10 - Closing the Sale & Moving In
The closing normally takes place in the developer’s solicitor’s office. You may not have to be present provided you have signed all the relevant documents in your own solicitor’s office. Once the sale is closed you can collect the keys of your new home from the site or selling agent.

Step 11 - Change your address
It’s also worth informing the following of your change of address:

• Friends and family
• Bank, building society and credit union
• Credit card, store card and loan companies
• Insurance companies (home, life and motor etc.)
• Your employer
• Revenue
• Doctor, dentist and optician
• TV licence, satellite and cable companies
• Mobile and home phone companies
• Catalogue and publication companies
• Schools
• Gyms, sports and social clubs

We wish you the very best with your new home!

Note
The above steps are for guidance purposes only – if you have any queries with purchasing your new home please contact your selling agent.