First Time Buyers In Dublin – A Property Buying Guide
Dublin has recently been dubbed ‘the most attractive property market in Europe’ with investors and residential buyers alike, sizing the capital up for its strong return on investment, high rental demand and the city’s invigorating, historic and cosmopolitan feel.
With house prices steadily on the rise, the property market in Dublin offers first time buyers both affordability and a sturdy investment opportunity. However, for new and seasoned buyers alike, the process of buying property can seem like an endless race through jumps and hoops.
But with the right support and information, buying your first property in Dublin can be a positive and hectic-free process.
Our Dublin Property Buying Guide will provide you with a checklist of everything you need to consider and do when buying property in Dublin.
Follow the guide down or use the drop down links below to skip to a specific area:
- Choosing your Property
- How Will You Pay For Your Property?
- Method of Sale: Auction or Private?
- Is the Property Freehold/Leasehold?
- Property Title
- Searches Against the Property
- Total Costs
- Make an Offer
- Exchanging Contracts
1. Choosing Your Property
Dublin is a large city with a huge amount of choice and variety, offering something to buyers with all ranges of budgets and personal preferences. However, there are many other aspects about the property that you need to consider before sealing the deal.
What can I realistically afford?
If, like most people, you’re borrowing to buy, it’s important to consider how much you can afford to borrow. Most people set out with a budget in mind, however dream properties can sometimes get the best of us, and bigger mortgages are applied for.
After you find out how much your creditors will loan you to buy a property, you should consider carefully if the repayments associated with the loan are something you can comfortably afford.
Even if you are granted a bigger mortgage than expected, allowing you to buy the home of your dreams, remember that years of hefty repayments can have a huge impact on your personal finances. Big mortgages can become a burden if you lose work or find yourself in any other type of financial crisis.
Where is the Property Located?
Buying a property is about more than owning your own home, and in a city like Dublin where property investments are set to offer good returns, it’s important to think about how the location of your property could impact the return on investment you’ll receive if and when you chose to sell the property.
Before buying, ask yourself the following:
- Is the area where the property is located popular/likely to become popular?
- What is the crime rate like in the area?
- Are there good schools/shops/restaurants nearby?
- How good are the transport links?
- Is the property near main roads/motorways?
- Is there development work set to take place where the property is situated? Will these help or hinder the property’s profitability?
Why am I Buying Property?
Many people buy property for lifestyle purposes, while others for investment reasons. Either way, it’s important to think long term about what a property can offer you.
For example, the first property bought by an individual will act as the foot in the door needed to get onto the property ladder, so consider how you might make your money grow once you’ve bought a property. Renovation, redecorating and choice of property location all come into this.
If you’re looking at a property for the long term, and not only as a way into the market, you need to think about how the property will serve you for the years to come.
- Are you starting a family?
- Is the property big enough for your current or growing family?
- Is the outside space sufficient?
- Does the area offer you everything you need in terms of amenities?
- Is there space to grow your property if you wanted to?
2. How Will You Pay For Your Property?
Ahead of buying, you’ll need to secure funding for a property. If you’re able to buy in cash, you will already have this sorted, but if you’re borrowing, this means a mortgage for the proposed price of the property has to be secured ahead of the sale.
Choosing a Mortgage
The market for home lending is very competitive, with banks and the various lending institutions all offering various deals and rates, so you need to talk to as many providers as possible to understand how each can help you.
Talk to prospective lenders about interest rates, general terms of the contract, and contract length.
Once a lender has given you an idea of the amount they are willing to lend you, you can determine your actual budget.
If you are using a mortgage to buy, you will need to put down a deposit on the property. This is usually anywhere between 10-30% and will decrease the mortgage amount you need to apply for. Before buying, you need to have this deposit saved and ready to use.
Most people use savings and monetary gifts from family to pay a deposit.
Help to Buy for First Time Buyers
From January 2017, first time buyers in Ireland will be able to claim a tax rebate of up to €20,000, or equal to 5% of the value of the house they are buying. This incentive is to help people purchase new homes in Ireland, and is aimed at people who might not be able to afford to put down a big enough deposit in line with Central Bank Mortgage Rules. However, this rebate applies to new buildings only. This rebate can also be claimed on new homes bought since July 19th 2016. The Help To Buy schemes ends December 2019.
From Feb 1st 2018 – First Time Buyers in Ireland can also apply for low interest rate mortgages from local authorities – read more here about this Rebuilding Ireland Home Loan. Furthermore, extra savings can be made if first time buyers also manage to take out one of the bank mortgages that offer cashback – such as with Bank of Ireland, they could get as much as 8% total cashback.buying (Money Guide Ireland).
3. Method of Sale: Auction or Private?
Understanding how your property will be sold is crucial, and although most property is sold privately, some people choose to buy property sold in auctions.
Although property auctions can be intimidating, especially for those with little buying experience or knowledge, they can also be a great option for those with smaller budgets or who are looking for an investment project to do up.
However, if you plan to buy this way, organisation is key. It’s essential to have the property surveyed before attending the auction, as well as having the title of the property investigated before the financial arrangements put in place.
You’ll also need to instruct a solicitor to ensure your well being from a legal point of view.
4. Is the Property Freehold/Leasehold?
Knowing whether your desired property is freehold or leasehold is important, as it may determine what you are able to do with the property in the future.
A freehold interest in property is the highest interest that can be held, and allows an owner do exactly as they wish with the property. The property also belongs to the owner forever, until they choose to sell it.
A leasehold interest is less than a freehold interest, and means the owner just owns the building and not the land it is on. It also fixes your ownership for number of years – not forever, like freehold properties.
Leasehold properties also require owners to pay a ground rent to the person who owns the ground it is built on, an amount of which can vary. Often this is payable to the local authority, and will add to your regular expenses.
Be clear when buying, and discuss the pros and cons with a trained property solicitor.
5. Property Title
A property’s ‘title’ is the document that verifies that you that own the property, and guarantees that no one else can claim that they do instead. You need to be clear on what type of title your property has – a solicitor can help you identify which you need.
In Ireland, there are two types of property title:
- The registration of title system (Land Registry) which provides a State-guaranteed title to property
When title or ownership is registered in the Land Registry, all relevant details concerning the property and its ownership are entered on documents known as folios. These form the registers maintained in the Land Registry.
Any property registered at the Land Registry is known as registered land, as every transaction on a property is registered on a folio. The folio is guaranteed by the State as a confirmed record of the title to the property to which it refers.
- The registration of deeds system (Registry of Deeds) which records the existence of deeds and conveyances affecting property
The Registry of Deeds Title is that which is registered with the Registry of Deeds. It is used when the title has built up over a number of years, and includes Deeds of Conveyance used to transfer freehold-unregistered land or Deeds of Assignment used to transfer leasehold unregistered land.
On completion of a sale of an unregistered property, the purchase deed is lodged with the registry of deeds where the details of the registration and the time of the registration are noted on the Deed.
6. Searches Against the Property
Depending on your plans for the property, a number of ‘searches’ are required to be made against the property ahead of the sale. These include:
- A planning search
This is to determine whether the property is zoned residential, commercial or otherwise, whether there any proposals for road widening in the area; and whether or not any applications for planning permission in respect of the property have been granted or indeed rejected.
- A licensing search
This is needed for properties acting as a pub or a hotel, and establishes whether or not licensees for alcohol and other restricted goods are permitted.
Discuss with your solicitor whether or not you need to carry these out ahead of purchase.
7. Account for All Costs
There are several extra costs involved in buying a property, most of which are separate to the purchase price of the house. These need to be accounted for ahead of buying, and include:
- Stamp Duty
This fee applies to all transactions made in relation to purchasing the property, and will depend on the value of the house.
- Search Fees
These will vary depending on the title and extent of the enquiries to be made, but any searches made on the property in advance of buying will need to be paid for.
- Solicitors Fees
You’ll need to contract a solicitor to carry out the property conveyancing, and this can vary from solicitor to solicitor. Many offer extra services such as will writing along with their conveyancing service, so it’s worth asking around to get the best deal. You can find out more about our conveyancing service here.
- Surveyors Fees
Having a property surveyed is critical for assessing the condition of the property. An experienced surveyor can flag up any structural issues with a property that may impact you in the future. Failing to do so can leave you vulnerable to expensive repairs or restoration.
- Registration Fee
These are the costs associated with registering the title with either the Registry of Deeds or the Land Registry.
All properties need insurance, and while it’s the seller’s responsibility to have the property insured up to the date of the closing, once the purchase is completed, it is the responsibility of the purchaser to ensure the property is insured.
Buyers will also need mortgage protection insurance. This ensures that if the borrower dies, the insurance will pay off the remainder of the mortgage.
8. Make an Offer
Once all the above is done, it’s time to make an offer on your chosen property. But before you do, make sure you’ve considered the following:
- Often, first time buyers, buyers with no chain and buyers who have pre-arranged mortgages have a head start on most of the competition. If this is you, make the agent and seller aware of this, as this can put you in a very favourable negotiating position, especially if the seller is in a chain.
- Check if the sellers are in a hurry to sell or have been trying to sell for a long time. If so, they may be willing to accept a lower offer to make the sale.
- Check, check and re check what the property is truly worth. While sold house prices in the area can help give an idea of recent sales, it’s better to see what the current competition is like.
Once you are certain of how much you will offer, your solicitor will contact that of your seller with the amount you have decided on. It is then up to them whether or not they will accept.
If the seller does accept your offer, ask them to take the property off the market. They don’t legally have to do this, but asking them to do so will prevent other potential buyers coming in and offering a counter offer.
9. Exchanging Contracts
When the signed contracts are swapped between the two legal firms representing the buyer and seller, and a deposit is paid by the buyer, this is when an agreement to buy or sell becomes legally binding.
Your solicitors must draw up contracts, and both parties must agree upon a completion date. Once these have been finalised and signed by both parties, the house will legally be yours, and no one can back out of the agreement.
Property Conveyancing with Gibson & Associates
At Gibson & Associates, We offer a true quality of service when it comes to conveyancing.
Our job is to make sure your property transaction proceeds smoothly and efficiently, and we pride ourselves on our extremely professional and high-quality service.
While our solicitors will handle all the details of a property exchange, they will also ensure you’re kept in the loop, explaining the process in an approachable and jargon-free manner.
We also offer fixed fees on all our conveyancing services, so you’ll never pay more than first agreed. We also offer our clients a free will when they use our conveyancing service.
Get in touch with our dedicated team today. We’d be delighted to answer any queries or questions you may have – Don’t delay, please call us now on +353 1 264 5555 or complete our Online Enquiry and we’ll be delighted to help you.