First-time buyer seminar

We had a great first-time buyer seminar last night in the Clonmel Park Hotel. Hosted with Frances O’Hanlon mortgage brokers, the event featured speakers on topics such as mortgages, life cover, contracts, wills and of course property (which was done by me).

About 50 potential purchasers attended and a lively Q & A took place afterwards.

It was good to see that many people are starting out on the home purchase trail again.

At current interest rates, based on purchasing or renting an average 3-bed home, you can save €250-300 per month and own your own home by buying.

On a 92% mortgage, you will need savings of €12-14,000.

This will enable you to purchase one of a vast choice of homes in the Clonmel area.

At the end of January 2009, we had only 11 homes for sale at under €200k.

At the end of January 2010, we had 67 homes for sale under €200k.

Of these, 39 are under offer.

Prices are at a much lower level than one year ago and as a consequence, the level of interest in purchasing has increased greatly.

We are scheduling many more viewings this month than in any month last year.

So if you are interested in buying, now seems to be a good time, based on what potential purchasers think.

It is possible to lock into historically low interest rates at the moment.

Anyone with a view on this?

Posted via email from quirkeproperty's posterous

First-Time Buyer Seminar

We are organising a First-Time Buyers Seminar on Thursday 18^th February at 6.15pm in the Clonmel Park Hotel.

Speakers include:

· Pat Quirke, P F Quirke Auctioneers (me!)

· Friend’s First Life Company

· John Joy Solicitors

· Frances O’Hanlon Mortgages & Investments Ltd

Come and get all the information you need on buying or building your first home in just ONE HOUR!

Attendance is free - please register on 052 61 29487

www.pfq.ie

Banks not open for business

House prices are at their lowest for 5-6 years, while interest rates are lower than seen since the foundation of the State!
Despite innumerable adverts, running almost all day, proclaiming that the “banks are open for business”, it is almost impossible to secure finance on anything.
Since the start of the year, it has not been possible for those wishing to trade-up to get finance.
Now, even first-time buyers cannot get approval.
Banks used to give 3-6 month approval letters to prospective home-buyers.
Where they can now get approval for a much-reduced amount, it runs for only one month.
This is totally impractical.
If you get approval at the start of the month and look at homes in that first week, it would be very unusual for you to reach agreement on the purchase of a property within two weeks.
It will take at least a further two weeks for the solicitors to look at and approve a contract before it will be presented to you for signing.
The month is up before you sign the contract.
You then have to go back to seek approval again.
This can take 2-4 weeks.
If it comes through for you!
In the meantime, the vendor has assumed that you cannot proceed.
Your friends have gone from congratulating you on your intending purchase to planting seeds of doubt in your mind about the house, its location, the price etc.
You end up thinking that this is all way too much hassle and you do not proceed.
Which is what the bank really wants.
While politically, they are supposed to be “open for business” they do not want to do business at all.
Homebuyers get this message.
They are human.
They do not want to suffer rejection.
So they drop out of the buying process.
Just as they are doing now.
Young purchasers are passing up on the chance to buy substantially reduced homes, at substantially reduced interest rates and instead, continue to pay rent to fund a landlords mortgage.
Because the banks are not open for business.

www.pfq.ie

Why pay €10,000 a year in rent...that could be coming off your mortgage?

We had a great seminar last Thursday night at the Park Hotel, Clonmel.
About 50 people attended. I would estimate there were 10-12 parties interested in a purchase soon.
Claire McCarthy of Binchy Solicitors spoke on the legal process involved in the purchase of a home.
John Butler of Friends First spoke on Life Cover, Mortgage Protection, Critical Illness and Income Protection, one which is becoming more important in these uncertain times.
Frances O’Hanlon of FOH Mortgages spoke of the various types of mortgages that are available. She said that sadly, Tracker Mortgages were no longer available, but that for the moment she would have to recommend variable. With falling interest rates, this seems the most sensible current option.
I spoke about how it is now much cheaper to buy than to rent. A combination of falling interest rates and falling house prices have combined to make monthly repayments on house purchase cheaper than it has been for years. Most homes can now be bought with mortgage repayments (over 30 years) for approximately €200 per month less than the cost of renting the same house! You could sum up my presentation in one line:

Why pay €10,000 a year in rent...that could be coming off your mortgage?

A great Q&A session took place afterwards, with many questions of a legal nature for Claire. Eventually talk came round to the market and my forecast for it. Lots of buyers are fearful that if they buy now, prices will continue to fall and they will “lose money.”
I do not have a crystal ball, and if I did, would not know how to use it!
What I do know is that you buy your first home as just that, a home, not an investment.
Most people will pay a mortgage for 30 years of their life.
Why not start that process as soon as you are able?
Why pay €10,000 a year in rent...that could be coming off your mortgage?

Sure, house prices may fall...they may rise, who knows? But you need a home. You will be paying for it any way. Why not start now?
Why pay €10,000 a year in rent...that could be coming off your mortgage?

People who bought two years ago are facing a drop in value in their home, but they do not have less cash.
If prices fall, your “loss” will only crystallise if you sell.
If you sell your home, you will probably be selling to buy another one.
Logically, that will have reduced by the same amount in percentage terms.
So the sum will be the same.
What you “lose” in selling, you “gain back” in buying.
Why pay €10,000 a year in rent...that could be coming off your mortgage?

Prices are at 2002-2003 levels.
Interest rates are at unprecedented levels.
You can get insurance to protect your mortgage payments on an average house (in the event of unemployment) for €40 per month.
Why pay €10,000 a year in rent...that could be coming off your mortgage?

At the risk of sounding repetitive!
Why pay €10,000 a year in rent...that could be coming off your mortgage?
Think about it...today.
www.pfq.ie

Figures, figures, figures

As I am preparing my presentation for the first-time buyer seminar tonight, news is coming in of a further reduction in interest rates by the ECB today.
A full half-percent to bring the base rate to 1.5%, never before seen in Ireland... or too many other places either for that matter!
Of course it makes the figures I am using for comparing mortgage repayments with rent payments redundant, but at least it makes them better, not worse.
At a base rate of 2%, you could buy a house costing €175k (€235k in 2006) for just €612 per month, compared with a current rental value for the same house of €800 per month, saving just under €200 per month.
If the new rate is passed on, then the saving will be over €200 per month! Buying a house for yourself instead of buying one for your landlord.
Given this sum, to most people, purchasing a home instead of renting would be the logical thing to do.
But there is a problem.
Maximum Loan-to-value is currently 92%. So to buy a house, even priced at €175k, you need a minimum of €14,000. Add on solicitor and some furniture and you are really looking at €16-18,000.
Therein lies the problem. Very few young first-time-buyers have access to this much savings.
In the boom, there were 100% (and in many cases 115%) mortgages, with figures being "massaged" at all stages.
As an agent for almost 25 years, I could not see how someone who could not raise €5,000 for a deposit could borrow up to €300,000.
But this happened... all too regularly.
When 100% mortgages became unavailable in May 2008, many parents helped out their children by providing them with "loans".
In the current economic climate, with no one's job secure, this is not happening as much.
An average couple renting at present could save perhaps €1,000 per month or slightly more. Those that are buying at the moment have been saving for almost 18 months.
Those that started saving when 100% mortgages were abolished last May have approx. 8-10 months left before they can buy a home, however low the market goes.
That said, we are still selling well-located, properly-priced homes to qualifying buyers. They are buying homes at 2003 price levels.
And saving €10,000 a year in rent.
www.pfq.ie

First-Time Buyer Seminar - March 5th

We are running a First-Time Buyers Seminar in conjunction with FOH Mortgages and Binchy Solicitors on Thursday 5th March at 6.15pm in the Clonmel Park Hotel.

Register now by emailing patq@pfq.ie or calling 052-6121622.

See you there.

Light at the end of the tunnel?

Over the last 2-3 weeks, we have noticed a marked upswing in home viewings. This has resulted in an increase in the number of pending offers received at our Clonmel office. The web stats are up and the phone is ringing more. We are all a little busier.

First-time buyers are coming back into the market. I see a lot of people that have been sitting on the sidelines, watching the market fall over the last year, now move to get mortgage approval, view houses and make offers. House prices are at about 2003/2004 levels, while interest rates are on the way down.

Money is still difficult to get, the banks are very selective about who they will (or can!) lend money to. It seems that job security is once again a prime focus for the banks. A lot of the newly approved potential home-buyers are in Government jobs, or very secure businesses.
The maximum loan-to-value ratio seems to be 92%. The people who are now bidding for homes have been saving for the last year or two and are in a position to come up with the 8% balance and solicitor fees of approx. 0.7-1%.

I speak to potential buyers numerous times a day. When we meet at a property, the state of the market is always a topic for discussion. A number of common themes are emerging. The general consensus is as follows:
1. House prices have fallen...a lot. First-time-buyer houses, which typically cost €230-250,000 in early-mid 2007, are now priced around €200-215,000.
2. Interest rates have fallen, and it seems are due to continue falling, improving affordability.
3. As stated, these potential home-buyers have spent the last year or two doing what their parents urged them to...saving.
4. Vendors are more acclimatised to the drop in prices and will listen to reasonable offers. They will include more in the house sale and are now bending over backwards to entice buyers.
5. First-time buyers are the only group that banks are targeting at present, so they know that they are the only buyers in the market. This gives them more confidence.
6. That same knowledge is also a big driver to them. Their friends are starting to put in offers on houses and they see more and more houses being marked as Sold on http://www.pfq.ie/ and in our office. They do not want to be left behind!

In other words, they feel that the market may have bottomed out, or be close to doing so. They realise that if the Government inject money into the system, resulting in more liquidity, then prices will stabilise, if not harden slightly. With lowering interest rates and lower house prices, it really is now much more affordable to buy than to rent. Of course, the money paid on a mortgage is actually for their own benefit, unlike rent, viewed as “dead money.”

Is this the start of an improved outlook for the housing market? Time will tell. All I know is that people that only a year ago thought they would never afford a home are now completing purchases and will be in for Christmas.