Preparing Your Budget
Firstly, congrats on deciding to buy your new home! Especially so if it's your first, as I've just done myself.
As a first time buyer, the process can be especially daunting at the very start, when everything is new and uncertain, and you know that you have so much to learn over the coming weeks and months.
Before you even go about choosing your new home, start looking at budget. And I'm not talking about mortgage repayments, at this point you are probably already approved-in-principle for a certain amount and have a vague idea of what your repayments will be. I'm going to look at all the up-front costs involved in your new home, over and above the deposit. Trust me, you don't want to be caught short here!
So let's start with the obvious ones - legal fees! You will have to work with a solicitor in order to complete your home purchase. The good news is that most solicitors should work to a fixed fee for a standard home buying process. But always ask, best to be sure!
Oh, and the price quoted will likely be ex-vat, as this is how most solicitors quote and charge, so don't forget to factor in the 23% extra on the price!
There are some fixed charges associated with a home purchase. These are non negotiable and must be paid before you can close your sale.
The most notable are: Stamp Duty (usually 1% of your home's purchase price); Land Registry (not sure if this is for new homes/land purchases only, as I bought a new home myself); Mortgage Registration. There are a few smaller charges also, but all come in at €150 or less each. Always have a little extra savings for these little surprises.
Valuation - you'll need to have a valuation done in order to apply for home insurance and also needed to close your sale. The price varies - some banks require you to use their valuations department at their fixed cost, others allow you to shop around for a valuations company and the costs could vary, but shouldn't be more than €200-300 overall.
Snagging - it's recommended but not essential to hire a professional snagger to give your new home a thorough inspection and identify issues before you pay the builders. Some people do their own snag, but when I tagged along with my snagger, I was amazed at the things he pointed out that I'd never have noticed, or thought to look for! Now thankfully I had nothing major come up, but a professional snagger could save you a lot of future pain by pointing out potentially serious issues (leaks, structural damage, or just a host of little things that cumulatively could cost a lot to repair yourself. My advice (purely personal) is pay for a snagger. Should set you back a few hundred Euro, but you can shop around and gather quotes up front. Have your property details handy as they'll need to know the size of home, type, etc, as this affects the price.
Management fees: if you're buying a new or existing home or an apartment in an estate or building run by a management company, be aware that you may be required to pay the annual fee up front (or have a short grace period after moving in before this is due). Check with your solicitor (or new neighbours) what is included in this fee, as some will include things like bins.
Now we get to the personal/variable items, so costs will vary greatly from family to family and home to home. Consider what is essential to have in order to fully move in, vs what can be acquired later. What do you have already vs what do you need to buy (or replace). Things like:
As a first time buyer, the process can be especially daunting at the very start, when everything is new and uncertain, and you know that you have so much to learn over the coming weeks and months.
Before you even go about choosing your new home, start looking at budget. And I'm not talking about mortgage repayments, at this point you are probably already approved-in-principle for a certain amount and have a vague idea of what your repayments will be. I'm going to look at all the up-front costs involved in your new home, over and above the deposit. Trust me, you don't want to be caught short here!
So let's start with the obvious ones - legal fees! You will have to work with a solicitor in order to complete your home purchase. The good news is that most solicitors should work to a fixed fee for a standard home buying process. But always ask, best to be sure!
Oh, and the price quoted will likely be ex-vat, as this is how most solicitors quote and charge, so don't forget to factor in the 23% extra on the price!
There are some fixed charges associated with a home purchase. These are non negotiable and must be paid before you can close your sale.
The most notable are: Stamp Duty (usually 1% of your home's purchase price); Land Registry (not sure if this is for new homes/land purchases only, as I bought a new home myself); Mortgage Registration. There are a few smaller charges also, but all come in at €150 or less each. Always have a little extra savings for these little surprises.
Valuation - you'll need to have a valuation done in order to apply for home insurance and also needed to close your sale. The price varies - some banks require you to use their valuations department at their fixed cost, others allow you to shop around for a valuations company and the costs could vary, but shouldn't be more than €200-300 overall.
Snagging - it's recommended but not essential to hire a professional snagger to give your new home a thorough inspection and identify issues before you pay the builders. Some people do their own snag, but when I tagged along with my snagger, I was amazed at the things he pointed out that I'd never have noticed, or thought to look for! Now thankfully I had nothing major come up, but a professional snagger could save you a lot of future pain by pointing out potentially serious issues (leaks, structural damage, or just a host of little things that cumulatively could cost a lot to repair yourself. My advice (purely personal) is pay for a snagger. Should set you back a few hundred Euro, but you can shop around and gather quotes up front. Have your property details handy as they'll need to know the size of home, type, etc, as this affects the price.
Management fees: if you're buying a new or existing home or an apartment in an estate or building run by a management company, be aware that you may be required to pay the annual fee up front (or have a short grace period after moving in before this is due). Check with your solicitor (or new neighbours) what is included in this fee, as some will include things like bins.
Now we get to the personal/variable items, so costs will vary greatly from family to family and home to home. Consider what is essential to have in order to fully move in, vs what can be acquired later. What do you have already vs what do you need to buy (or replace). Things like:
- Furniture
- Beds
- Couches
- Dining room set
- Floors (new homes are sold without the lovely wood, laminate, or tiled floors - you may get your builder to install those for you, but they WILL charge, and you'll still have to pay for the flooring materials).
- Floor installation is generally charged per square meter, so be sure you know how much flooring you'll need to get an accurate quote. How much of each type.
- Appliances - most new homes come with nothing, but some developers may offer early signup incentives by including kitchen packs, etc. These will come pre-installed for you.
- Fridge
- Stove/hob
- Oven
- Microwave
- Extractor (for the stove/hob)
- Washing machine
- Tumble dryer
- Dishwasher
- Miscellaneous items
- Pots and pans
- Cuterly and crockery
- Welcome to my new home champaigne!
- Baking equipment
- Splurge on a GOOD coffee machine (it's an investment that'll bring you great joy!)
- Bins (surprisingly expensive!): kitchen bin (general, recycling, perhaps a food waste bin); bathroom bins and toilet brushes (how many bathrooms in your home?!)
- Welcome mats (something nice for the front, practical for out back, saves a lot of cleaning!)
- Hoover (upright, cylinder, cordless, Roomba, wet/dry, the choices, and prices! are endless)
- Washing line (retractable or fixed wire, vs pole plant type)
- Spa day / masseuse to help with those sore backs and muscles - moving is HARD work. Totally optional, but definitely something to consider.
- Bathmats, shower caddy (especially if you're upgrading number of bathrooms, you'll find yourself short on these
- Towels and bedding (if increasing number of bedrooms/beds, you're also likely to find yourself short)
- Setting up a home office (keeping in mind that this post is written in the midst of the Great Irish Covid-Lockdown of 2020 - WFH is no longer a luxury for many, but a necessity, for those of us fortunate enough to have jobs where we can do this)
- Additional wifi routers/wifi range extenders - if you've got a large house or multiple storeys, a single router's wifi strength could be rather week at the furthest end of the house. And I'm not talking a big house - many older homes have rather solid internal walls which do a great job at blocking/dampening a wifi signal. For these, you may need to consider the pricier option of those range extenders that use your internal electric cabling to transmit your internet connection and outputs via a wall-plug type range extender.
- Internet and TV services - installation charges are likely when setting up a new service, especially if you require a satellite antenna (TV or satellite internet)
- Moving company or van rental (depending on how much stuff you have to move)
- Cleaning services - definitely one to think about, whether it's a new build (construction dust, yuck!) or existing home (how well did the previous owners clean up after themselves?)
- Blinds or curtains
- Shed (if you have a garden and there isn't already one - storing gardening equipment and bikes etc)
- Garden - mainly for new houses, at most you'll get a seeded lawn
- Attic stairs
Also remember to factor in ongoing costs, over and above your mortgage repayments, as these are what you'll be liable for each and every month:
- Electricity
- Gas
- Bins
- Internet/TV/Phone
- Insurance
- Life assurance/mortgage protection (required in order to be approved for your mortgage)
- Mail redirection service (An Post) - or you could strike a deal with your landlord or person who is buying your old home to forward your mail until you've caught all the address changes - trust me you'll think you got em all, but there is always one sneaky little service that never sends you anything in the mail, until you've moved out!
- Other bills such as car payments, mobile phone bill, etc that all affect your budget
These are just some of the things that I discovered on my journey through the house buying jungle.
My personal opinion is to save up as much as possible for buying outright, do not get sucked into too many financing offers - sure it's only €30 a month here and €50 a month there, over x months or years, but every little installment adds up, especially if you're buying things from different stores to take advantage of special offers, it's too easy to lose track on how much you'll be paying extra every month until all of those items are paid off. You could find yourself in a situation where the extra repayments push you over budget and you have to either downsize your mortgage budget (and potentially not afford the home you were so set on buying) or have to cut out some non-essential monthly bills elsewhere (TV being one such expensive luxury!)
In summary - do not underestimate the upfront costs involved in buying a house and making it into a home. Do your research now, save yourself any nasty surprises down the line. Surprises there will be, but you can be prepared, they don't need to be nasty :)
Happy home hunting!
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