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4 home buying disasters you can avoid

flooding in luxurious kitchen interior

18 Aug 2017

Posted in:  First Time Buyer

When the average Irish person thinks of disasters, their mind usually zips to films about extinction-level events.

We certainly never think of home buying as a disaster strewn event on a scale with Pierce Brosnan fleeing a lava-spewing Dante’s Peak.*

And while a bad home-buying decision isn’t likely to be captured on the big screen, it’s still a big deal if you get stung. So what are the disasters you need to avoid when buying your first home? We’ve outlined them all below (so you can do your best to dodge them).

1. Buying on a floodplain

In the realm of the more literal disaster, floods are common. Flooding in late 2015 made the news, as local authorities paid out €16 million to cover flood response expenses.

So what happens if your house is on a floodplain? Well, it could be fine. Or, it could rain heavily, a local river could burst, and your ground floor could flood.

Before you buy, enter the address into Floodmaps.ie for information on local flooding. You can also phone local home insurance providers and ask for a quote. Take it as a bad sign if the insurer is quick to state that flooding is excluded from the cover, or if they won’t provide insurance at all.

2. House hunting before you’ve got Approval in Principle

When you start house hunting, it’s very easy to get swept up into a sea of ‘must haves’. You see a house and you fall head over heels for its pretty façade.

This is it, you think. The house of your dreams.

It’s not quite that simple. Just think about it from the seller’s point of view. The house could have been on sale for a while, and there may be several bids on the table. So while you might be tempted to rush in with a bid, to a seller, a buyer with Approval in Principle is a far more attractive prospect.

Your best bet is to secure Approval in Principle with your lender, before you start looking at houses.

3. Forgetting the ‘hidden’ cost of buying a home

Okay, so you’ve done a big chunk of the work: secured Approval in Principle, saved your deposit, been house hunting and made a serious bid on a place you really like.

You’re nearly there, but a couple of financial hangers-on will still need to be looked after. Buying a house in Ireland can come with several hidden costs for home buyers.

The hidden costs come as a tranche of fees:

  • Legal fees – expect to pay a flat fee (usually 1-2 percent of the purchase price) to cover the legal fees of your house. Don’t be afraid to shop around – and don’t forget to factor in the additional 23 percent VAT.
  • Surveyor’s fee – your surveyor is very important as their report will root out any home problems that might become a big deal like structural skeletons or leaky pipes. Expect to pay around €300 plus VAT.
  • Stamp Duty – this is a tax you pay when you’re a buying a home. The fee depends on the price of your property, and works out at 1 percent of the value up to €1,000,000 and 2 percent thereafter.
  • Property Tax – this tax is paid annually and is calculated based on your valuations. Head over to Revenue’s site to see how much you can expect to pay.
  • Insurance – namely Mortgage Protection Insurance and Home Insurance. The prices here will vary depending on your provider.
  • Valuer’s report – your lender will request that you hire a valuer to make sure you’re paying a fair price for your home. Typically, it’ll cost you approximately €150.
4. Skipping the surveyor’s inspection

Your seller could be one of the most honest people you’ve ever met, and they still may fail to mention that weird hole behind the toilet in the upstairs en-suite.

It’s worse again if there are problems with the foundation or the plumbing. You need a reputable construction expert to come in and assess the fabric of the house, otherwise you could face big repairs and a massively inflated budget.

A surveyor will go through the house with a fine-tooth comb to make sure everything is in good order. They’re trained to spot all the things you won’t, so this really is an essential you can’t afford to miss.

Are you thinking of buying your own home?

Now that you’re up to speed on some common mishaps for home buyers, you can also apply for the best free advice for every stage of the mortgage journey.

Find out how much you can afford to borrow with our mortgage calculator or book a mortgage meeting to suit you with one of our Mortgage Masters.

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*If we mention celebrities, we’re not saying they love us. The secretly might, but that doesn’t mean they endorse us.

The content of this blog is expressed in broad terms and is limited to general information purposes only. Readers should always seek professional advice to address issues arising in specific contexts and not seek to rely on the information in this blog which does not constitute any form of advice or recommendation by EBS d.a.c.

EBS d.a.c. neither accepts nor assumes any responsibility in relation to the contents of this blog and excludes all warranties, undertakings and representations (either express or implied) to the fullest extent permitted under applicable law.

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