How (not) to buy a house in Ireland
~ Carol Tallon
So, how do you buy a house in Ireland? You make the decision to buy, look for a mortgage, find your dream home, make an offer then have that offer accepted and, six weeks later, pop open the champagne, right? Wrong; the process, and certainly the experience, of buying a property in Ireland has changed dramatically. Over the past few weeks, while researching house-hunter experiences in the current market, I was genuinely surprised by the stories I heard.
Of the buyers I spoke to, most were working in Dublin and struggling to find an affordable house for their families within commuting distance. None were house-hunting for less than 18 months, this alone seems outrageous at a time of reasonable supply in many of the areas – South Dublin excluded. One family I spoke to, told me of their decision to move back to Ireland in 2005, falling victim to the property boom within months of returning home. This family is now left with a starter home that they outgrew within a short few years but are unable to sell due to negative equity equal to the value of the property. Sensibly, they rented out their small house and moved themselves, their children and their home office into a much larger rural house, within comfortable driving of the Capital. This led to a better pace and quality of life for the family; they seemed to understand inherently what many Irish families do not. This is, ‘home’ is not about ownership but rather where your lives and your family are. This move, although it was intended as a temporary one, made the family re-evaluate what they wanted in their next house and that changed the focus of their house-hunting. They decided that rural living quite suited them. After two years and two false starts, sale agreeing properties that were not genuinely available for sale, I am happy to report that they are now living in their new home and planning an upgrade to create the ideal space for them. It has undoubted been a stressful few years for them and they still have the issue of their first home – or more importantly – their first mortgage to contend with, but they are optimistic about starting over.
Another couple I had the opportunity to chat to also share the experiences of chasing properties that somehow do not appear to be available. They described falling in love with their dream home, only to see the dream take on nightmarish proportions as they waiting month after month for the sale to go through. After five months, failed contracts and almost a thousand euro in survey and legal fees down the drain, they found themselves back on the hunt. By this time, the market in their area had rallied, more buyers were turning up for viewings and offers started to exceed the asking price. In one instance, they were considering bidding on a property that they had rejected almost a year earlier only to be told that they would need to pay a further €40,000! The five month delay on the house they could not buy cost them more than time and no-one is held accountable for this. In is not the estate agents’ fault, the system provides for a booking deposit that has less contractual obligation than the proverbial nod and a wink. But is does beg the question, if tyre-kicker buyers are not to be entertained, how are sellers with no genuine intention or ability to sell entertained in the current market?
Anecdotally, the sellers’ mortgage lenders are blamed for withholding consent for the sale, in instances of negative equity, but surely this is something that should be sorted out well in advance of offering the property for sale on the open market.
One particularly toxic case recently saw a young Irish emigrant couple, who were purchasing in Ireland with the intention of having a property to return home to in time, get caught in the middle of what appeared to be a row involved two competing estate agencies. Both firms claimed to have instructions but neither was ultimately in a position to stand over an offer that both had accepted, at different times, on behalf of the seller. Perhaps the seller was less than forthright with each of his appointed agencies, or perhaps there was some professional point scoring, in any event, this couple lost the property that they had sale agreed almost two months previously. They are out of pocket to the tune of €500 for survey and legal expenses, and they had to wait for weeks while one of the estate agencies deigned to return the booking deposit (which ought to have been returned immediately). The whole experience was toxic and is an example of how vulnerable buyers feel in today’s market. In fact, with the return of such unsavoury behaviour seeping back into the market – which smacks a little too much of Celtic Tiger era practices – perhaps now is time to stop calling this a buyers’ market.