Hi Folks, long-time lurker, first-time to post other than on the introductions. My sister is about to bid (at auction) on a house and has come to my brother and me for advice. He’s very much a VI, and is convinced that this is not a crash, it’s a skid, whereas I have become (partly through reading this site every day) a devout bear.
The house is one of a terrace, and is being advertised at 30k less than other houses on the same road because it has been rented for a good while and needs a good bit of tidying up. She can afford the mortgage, and afford an increased mortgage when rates go up again.
She has been renting since she left college, in Dublin and the US, but is now back in Ireland about a year, and never intends leaving. She is frustrated at not having her own place and sees this as a bargain-basement purchase that will protect her from everything bar a total collapse in prices.
I am not convinced she should buy in this market, and have suggested she should wait until the next ESRI/TSB report is out and the next quarterly reports come out, but the house is being sold next week so she has to settle on a bid this week.
It suits her perfectly, a walk to work, two mins to the shops, a blank slate inside so she can make it her own, affordable in every way, yet I’m still wary.
My concern is that if she buys and then in 24 months has to move on, will prices have fallen to such a degree that she wont be able to do that ? Or is the fact that she may get this house at a substantial discount insulation against the risk of all but the worst collapses ?
For the record, the house is advertised at 250k, against 280k for similar houses on the street/in the area. She is considering setting an absolute limit of 230k for herself.
What are the different scenarios she is up against ? My instincts are to advise her to not bid, wait 12 months, and buy the same house (or better) for less money. Hers tell her to buy now.
Why shouldnt she buy (assuming she gets it at 230k) ?