Buying dream house how much to offer

Am looking to buy a house and for a number of valid reasons I am going to buy in the next sixth month. I have seen an amazing house where they are asking 450000, The most i can offer is 350. What is my best stratagy in terms of offering, and do you think 350 could be accepted. I know the general idea behind this site is “dont buy now”, But I dont want to live long term in a rented house and the problems of moving if owner needs to sell, settling kids down to schools etc,

i would offer 259k, 1 heavy pig and 12 geese no more no less . . . .

Believe me, I know plenty of problems with renting in this horrible little gangster nation.

However, please do allow me to ask you some questions based on your own posting.

  1. What are your valid reasons? Within those reasons have you considered that within the next 6 months there is quite a reasonable opportunity that prices of houses in general will falls some 5%. Then you may save something like 20K on that house (if it follows the general trend)? Is this saving in work and money a consideration to your quality of life along with the ownership of a home that you cannot afford?

  2. In terms of strategy, never offer more than you can afford. Never open at your maximum potential offer. Strike lower than that, a good place is about 30% below what you can afford or how much the house is worth to you.

  3. There is lots of security with owning your own place and having the fixed abode security. Yes, there is a reasonable opportunity that you may be turfed out but my personal experience is that it rarely happens. Generally landlords want to keep good tenants.

But how about if you buy this dream house and the market continues to fall and then you, as your own landlord, have to sell, for reasons outside of your control, such as employment change, health issues, neighbour problems, environmental factors. What do you do then? Renting gives you flexibility. Children, especially if they are less than teenage years have remarkable flexibility and if involved in family financial decisions can probably give some wonderful true insight that goes beyond much of what our ministers could offer you.

To add to wii’s questions. When you say €350k is that the most you can afford is that when you include interest relief (assuming you’re a FTB) and a fixed interest rate?

Have you stress tested what you afford should rates rise another 3% for example? And is that mortgage over a 35-40year plan or a more reasonable 25-30?

Thanks for the very considered reply. regarding house prices going down, if I offer 100grand less than asking price does this not at least cover that? The valid reasons have got to do with me be able to secure a mortgage now but not in 6 months. Regarding children being flexible, my kids are younggish and we have been moving a bit lately and I definatly think it has effected them moving creches house etc.

However really appreciate your responce both on the stratagy and renting. Given me plenty of food for thought

How heavy?

Mortgage is over 30 years. Both mine and partners inclom is set to rise incremently into the future. We can manage it but would be tightish. Something we have thought about thought.

Have you thought about higher taxes and stress tested with a likely 5-6% mortgage rate long term?

P.S. Play around with this → drcalculator.com/mortgage/ie/

I predict pig weight and prices going down well into the future.

You say this but you also said that you wouldn’t be able to secure a mortgage in 6 months time. How so? Are either of you planning on taking some time off work?

I’m genuinely interested as I intend taking a few months out to go travelling next year which when I return I’m afraid it will reset the clock on the length of time I’m in my current employment but that’s the private sector for you. (Hoping to to come to an arrangement with the boss on this though).

That does require some exposition.

Change of employment so nature of contract will be changing from permanent to temporary. Realisticallty thought I am sure new employment is secure. however wont be able to put that on income statement for purpose of loan. So will not be able to secure loan without it.

Is there a change in income?

I seriously have a problem with this as a concept to be honest with you. It’s a material fact that is relevant to the bank’s decision making and if you are aware of it now, it should be passed on to them.

Okay thats fair enough and I admire your honesty. If I did not feel like I had that ability to pay the mortgage off in the new circumstances I would not get if out in the first place. I can cover the mortgage in the new conditions when they arise.

I would suggest, that if you are already referring to the building as your “dream home” then you are in danger of making an emotional rather than logical or rational decision with regard to how far you will undermine your financial position in order to secure ownership of it.

Take a step back, view the property as a commodity, one of many that have similar if not identical attributes.

When negotiating over the price realise a few things;

  1. In the currently oversupplied market, you as one of the few buyers (assuming you have the cash to close the deal) hold the power.
  2. Don’t get emotional about the purchase. We have seen what happens when grown adults treat house buying like a teenager begin dumped by their boyfriend/girlfriend and get all clingy and needy.
  3. Be willing to walk away from the deal if it does not suit you.
  4. There is absolutely no requirement for you to be reasonable or flexible in negotiating the transaction (you can be damn sure the vendor or their agent won’t be). Its your money (a lot of it), your financial future (30 or so years for an average mortgage) and the rest of your life to deal with buyers remorse and ask “what if I’d paid €100,000 less for this?”

WRT the price, I don’t do WIW, but any asking price must be viewed in the light of the following;

i) Massive oversupply of both newly built, unsold properties and vacant “investment” units with estate sales always adding to the supply.
ii) Few buyers in the market
iii) The Irish economy is unlikely to return to a growth pattern that significantly erodes the numbers of unemployed while sustaining population growth for at minimum (IMHO) 10 years.

Set a price you are happy with, set conditions on the transaction you are happy with and then stick to them. Play hard ball if necessary. Walk away if you think the other party is “playing” you.

Your money, your call.

Blue Horseshoe

Makes so much common sence there again thanks. Good to hear this as it strengthens my resolve in relation to negotiations. However I have been looking in this area for some time now and there is a very scarce supply of good quality family homes with a garden in a good location, you would be amazed.

again brilliant top quality advice

If the price is "tightish"with two incomes and over thirty years then that should tell you something.
When the dust settles you should be able to buy a house over 20-25 years with one income.
Just my opinion.
By the way when you say “dream” house. What’ so special about it? I often ask this of people and I’m genuinely interested in what they define as their dream house.

for me that would be a period 3-4 bed property with high ceilings and loads of charm (both internally as externally) located in a decent area, recently renovated to a high standard, with decent sized garden and garage for less than 200K

Define ‘charm’ for me hollebollegijs. In terms of property that is, not as in a “we’d have to be talkin about one charming mother**** pig” kind of way.