Understand the costs involved in buying a home
Perhaps the hardest part of the buying process is in figuring out how you will be able to finance your purchase. Aside from the actual purchase price you will need to consider the other costs involved so that you are fully prepared and won’t face any hiccups further on in the buying process. This will include such things as legal fees, structural survey cost if necessary, moving costs and the cost of furnishing your new home. But first, you need to establish which way you intend to finance your purchase and there are typically three ways to do this.
- Cash buyer – you do not need a mortgage to make a purchase, however you will be asked by the estate agent to provide proof of funds in the form of a letter from your bank, accountant or solicitor.
- Subject to Finance – like the majority of us, you will probably need to take out a mortgage to buy a property. you will need to demonstrate mortgage approval from your bank, broker or accountant dated within the past 6 or 12 months depending on your provider.
- Subject to Sale – you have a property to sell and will be using the funds from the sale to buy another property. Where appropriate, ensure you advise the state agent on the status of your own sale is it may influence your future purchase.
Others costs to consider
Initial booking deposit – normally between 2-5% of the purchase price, this will be payable to your agent once your offer is formally accepted. This is fully refundable up until the point where contracts are signed.
Deposit balance – the balance of 10% of the purchase price, less your initial deposit is payable once you have signed the contracts, at which time it becomes non –refundable.
Stamp Duty – this is a charge that the government applies to the purchase of residential property. For properties up to €1,000,000 it is 1% up to the first €1m plus 2% on the figure in excess of that amount. Stamp Duty is paid to the solicitor at the closing stage of the sale and it is important to note that this figure is not covered within your mortgage amount.
Structural survey – estimated costs €300
Bank Valuation – estimate cost €150
Annual Service Charge – (Typically on apartments and some housing scheme). Where there are shared amenities and communal areas it is normal for Management Company to be in place to maintain the complex. The charge for this service is covered by your Annual Management fee.
Solicitor’s fees – this can be a flat fee or a percentage of the purchase price. This is a cost that you may be able to negotiate when you appoint your solicitor.
These costings can all add to a considerable amount so it’s important before beginning your property search that you get an idea of all the cost associated with buying your dream home.
Visit sherryfitz.ie and get our Complete Viewing Guide to start your journey with the information you will need to ensure that process runs as smoothly as possible.
