The Ultimate First Time Buyer Checklist
First time home buyer about to take the plunge?
Yep. We feel you.
And that’s why we’ve created a super-easy guide to lead you through every potentially stressful step on the path to home ownership.
So read on and you’ll be kicking back in your new living room in no time at all.
As a first time buyer you’re likely feeling nervous about purchasing a property. And with good reason! Buying a first home is often the biggest investment anyone makes in their life!
But here’s something to remember: millions of people do it every day, and the best route to success is to ensure you have all the vital financial and legal aspects in order.
So take a deep breath, follow along with our ultimate first-time buyer’s checklist …and let’s go get that house!
Checkpoint #1: Start Saving for a Deposit
Most people need to take out a mortgage to secure their premier property. But before you apply for this lifetime loan, you’ll need to have a deposit.
A first-time buyer deposit is at least 10% of the house price. And while this may seem like a huge amount, we have some great tips on how to save for a deposit here.
Remember too that as a first-time buyer you may be eligible for the Help-to-Buy scheme which runs until 31 December 2021.
This enables hopeful home-owners to claim a tax rebate of up to €20,000 for the purchase price of a new-build or self-build house or apartment.
There are other first-time buyer schemes available too. For instance, the government-backed Rebuilding Ireland Home Loans offer mortgages at a reduced rate to would-be house buyers who have been refused a home loan by at least two other mortgage lenders.
In addition, the mortgage allowance scheme aims to help tenants transition from social housing to paying a mortgage.
Remember Extra Costs
As well as having your deposit saved up, you should try to squirrel away an additional €5,000 contingency. This is to pay for other fees that are part and parcel of buying a property in Ireland – That’s everything from solicitors’ fees to searches and surveys.
Alongside that you may have moving costs or new furniture to buy.
It’s important to be aware that all residential home buyers have to pay stamp duty too. This is calculated at 1% of the selling price of any property up to €1m, and 2% for pads priced above €1m.
Checkpoint #2: Find a Mortgage Lender
Once you’re on top of your deposit, either with the money in the bank or a savings account in situ, it’s time to sort out securing a mortgage.
Advice for finding a mortgage lender is similar to that given when buying a car, your first sofa or even a bells-and-whistle laptop – always shop around.
Get guidance from friends and family. Or do your research, and see what’s out there.
Make sure you know how much you can afford to borrow too. Lenders will want to see proof of income and evidence of affordability. This latter info will come from rent and savings patterns as well as regular expenditures.
And all lenders will want to know that you’re able to keep up repayments even if interest rates rise.
So, get all your paperwork in order and then organise a few meetings with trusted banks and/or building societies.
Your paperwork should consist of:
- ID (passport or ID card)
- Confirmation of current address
- Your most recent P60 if you’re a PAYE employee / two years of certified audit accounts if you’re self-employed.
- Last three months pay slips
- Six months’ bank account/business bank account statements
- Credit card statements
- Any other information relevant to your current financial situation.
Put together a list of questions before the meeting so you can understand all the factors affecting the size of your loan – that way you can make changes to improve your financial situation.
Even though you’ve probably not found your perfect pad just yet, it’s important to get pre-approval from your chosen mortgage lender. That way, once you discover your dream home you can make an offer confidently.
What to Do If Denied a First-Time Buyer Mortgage?
If you’re denied, or offered a lower mortgage than you want, enquire why that is and what you can do to remedy the situation.
Over the course of the next few weeks, make spending and saving adjustments based on what your advisor says.
Set out a specific time period (typically 6 months) when you’ll come back with your affairs in order and seek pre-approval again.
Checkpoint #3: Hire a Solicitor
Hiring a solicitor is best done before you’ve found a property you’re happy to skip off into the sunset with. The reason for this is that it will speed up the whole transaction when you do find a property and put an offer in.
Your solicitor will handle all the legal aspects of the sale, including the conveyancing process. This involves a series of checks with local and other authorities ensuring that there are no nasty shocks awaiting the new key-holder, such as a house that sits on contaminated land or a new motorway due to zoom right past their doorstep.
These checks used to be carried out post-contract signing but since 2019, the Pre-Contract Investigation of Title (PCIT), has ensured that all property title queries are ironed out in advance of contract signing.
Solicitor’s fees can vary considerably, so check around before choosing one. Again, ask for referrals from friends or family, or find someone you trust from the Law Society of Ireland.
Checkpoint #4: Start Your Property Hunt
Now for the fun stuff! It’s time to start scouting for your future home!
If you already know the area you want to live, kick-off your search there.
If having certain features is an important factor, check out Perfect Property’s Perfect Match and find the best buy for your budget.
Simply select all the features you require from attic space to nearby transport, and set a maximum budget. Then from the comfort of your sofa, move around the map to see where these properties are located.
Make a shortlist of your favourite properties and contact the estate agent to set up viewings.
Checkpoint #5: Nail the Viewing
When viewing properties use your head rather than solely following your heart.
Sure, it may have bay windows to die for and be located in a lovely, quiet neighbourhood. But if that window turns out to be rotting, and your quiet location means you have to hike miles before you set sight on a bus-stop, your dream home may quickly turn into a live-in nightmare.
Factors to Consider
So keep your eyes peeled for any signs of wear, tear, rot and mould, and always consider these factors:
- Does the house get a lot of natural light? (If you’re viewing during the day and all the lights are on, that’s not a good sign).
- Which direction is it facing? (south-facing is best for all day sun …though savvy sellers might put the price up because of that!)
- How high is the Build Energy Rating(BER)? (A-rated homes are the most energy-efficient and G-rated homes the least efficient, so guess which one you should be looking for...?)
- What is the water pressure like in taps and showers?
- If it has a garden, is it overlooked and by whom or what?
- Are you facing a busy road?
- Is there a lot of noise from outdoors or other apartments if you’re checking out a flat?
Questions to Ask the Estate Agent
Have a list of big questions to ask the estate agent too. And don’t be shy: after all, you may be living in this property for the next 10 to 20 years!
Some questions to ask include:
- How long has the property been on the market?
- What are the current offers?
- What comes with the price?
- What contents are included in the purchase?
- Why is the vendor selling?
- When was the property constructed?
- Are there any management fees?
- Is there any planning permission on the property?
- Has there been any flooding in the area (if it’s near water)?
- What transport links are nearby?
And finally, take a walk around the area. Check to see what the local amenities are, including shops, parks, gyms, schools, or whatever else is important to you.
Checklist #6: Make an Offer
Once you’ve set your heart on a property (and your head’s in complete agreement!), it’s time to make your estate agent an offer.
Depending on how many people are looking at the property, you may decide to go high or low on your offer. Really, it’s up to you and how much you can afford.
A seller will accept a price that suits them and it may not always be the top offer. They may want a quick sale, for instance, and your offer may be looked on favourably if you can show you’re ready to buy.
Once your offer is accepted, make sure the estate agent has taken the property off the market and is no longer advertising it for viewings.
You’ll need to pay your estate agent a booking deposit and then they’ll send a document of sale to your solicitor.
Checkpoint #7: Apply for your Mortgage
Apply for your mortgage with the same lender that granted you pre-approval.
If you decide to switch lender, you’ll need to go through the pre-approval process again. If you get denied, it can negatively impact your credit rating.
However, don’t be afraid to negotiate the terms of mortgage – look for a percentage back in cash, an offer to pay your legal/valuation fees or fixed amount back in cash.
Checklist #8: Get a Structural Survey
Your lender will ask for a Standard Surveyors Report or a Mortgage Valuation to confirm that the value and condition of the property you want is in line with the loan amount you’ve applied for. But if you’re buying a second-hand home you would do well to get a deep dive structural survey completed on the property.
A Structural Survey (also known as a 'House Survey', 'Building Inspection' or 'Pre-purchase Survey') is a comprehensive look into the health of your potential new home.
And though it’s an added cost, it’s money well spent. After all, it can be the difference between shaving the price of a new roof off the current asking price or living in fear of your leaky roof every time a rain cloud bursts overhead.
A detailed report will cover:
- Opinion on the cosmetic finish of the property, such as floors, kitchen and bathroom fittings, doors, etc.
- Analysis of major and minor flaws and defects
- Repairs and maintenance advice
- Rot and damp test results as applicable
- Assessment of current damp-proofing, drainage, insulation and roof-space
- Information on the types of materials used in the property
- Recommendations for further specialist inspection if needed.
If you are buying a newly built home, you and your solicitor will receive a completion notice from the builder once all the work is finished. Following that, you need to draw up a snag list.
This is a list of of repairs and finish work you still require on the property.
Examples of items for a snag list include:
- Cracks in ceilings or walls
- Skirting boards not correctly placed
- Doors that don’t open and close properly
- Uneven plaster work
- Broken light switches
- Loose wiring
- Leaking pipes.
Checklist #9: Final Contracts and Documents
Once your offer has been accepted, you’re happy with the results of your structural survey and you’ve fully secured your mortgage, it’s time to finalise the deal.
Your solicitor will check all legalities surrounding the purchase along with the contracts. If they’re happy that t’s have been crossed and all i’s dotted, it’ll be time to sign on the dotted line.
You’ll sign two copies that your solicitor will return to the seller’s solicitor, and – voilà – just like that, you’ve legally agreed to buy the property.
You now pay your first time buyer’s deposit of 10% of the property’s purchase to your solicitor, who will arrange to have it paid to the seller through their solicitor.
Once the seller’s solicitor receives the signed contract and your deposit, they and the seller will sign and return one copy of the contract to your solicitor. After that, a final closing date will be agreed at which point you’ll be given the keys to your spanking new abode.
Checklist #10: Move-in & Throw a Party
Woohoo! You’ve done it! You’ve just bought your first home! Now it’s time to do a shimmy dance over the threshold and complete a final inspection over the house to make sure everything is grand.
Once you’re happy that everything is as it should be, you have one last task to complete: Invite all of your friends and family around for the house warming party of the century!