After many years in the auctioneering business, it’s safe to say Richie Dunlea has seen it all. I checked in with Richie to find out what are the most common mistakes that first-time buyers make.
For many people renting ,it feels like they’re stuck paying rent without managing to save at all. But according to Richie, the first step is often much simpler than people realise: find out what you can actually borrow.
Richie says he regularly meets renters who tell him they would love to buy but have never applied for mortgage approval. His advice is straightforward: be proactive and start the process with your bank or credit union. Once you know how much you have available to you, you know where to start.
“I meet a lot of people renting, and they say, ‘Oh, I’d love to buy,’” Richie explains. “But I say, ‘Have you gone about mortgage approval?’”
In many cases, people assume they will not qualify without ever checking. Richie says that, after encouraging them to apply, some are surprised to discover that they can get mortgage approval.
Once you have mortgage approval, the house-hunting process becomes much clearer. You know roughly what your budget is based on your savings and the amount the bank is prepared to lend.
From there, Richie says, it is a case of searching within that realistic price range. Sites like Daft allows buyers to select the area they want to live in and set their price range, making it easier to see what is available.
Getting approval in advance can also put buyers in a much stronger position when they find a property they want, making the process much quicker.
But Richie stresses that buyers should remember there are additional costs on top of the purchase price.
For a second-hand home, he highlights solicitor’s fees and an engineer’s fee as costs buyers need to budget for. He estimates solicitor’s fees at around €2,000 and an engineer’s inspection at around €500, although buyers should check current costs and budget accordingly.
Having these fees accounted for can help to avoid surprises later on.
Another key piece of advice from Richie is to look beyond the traditional second-hand market.
He says many people he meets at property viewings are unaware of the different affordable housing schemes that may be available. If someone is repeatedly being outbid, he suggests contacting their city or county council to find out what local affordable housing opportunities are coming up.
Richie has seen this make a real difference. He recalls one woman in Douglas who had lost faith after being outbid on a property. Through his contacts, he heard about a new affordable housing scheme and encouraged her to make contact. She eventually secured a brand-new home for herself and her son.
For Richie, it is an example of why buyers need to keep looking at all the options available to them rather than assuming that repeatedly losing out on private-market properties means home ownership is out of reach.
Richie’s overall message to first-time buyers is to be proactive. Speak to your bank or credit union, establish your borrowing capacity, understand your full budget and investigate schemes that could help you get onto the property ladder.
He also points to the importance of simply keeping an eye on what is coming onto the market, as new developments and affordable housing opportunities are continually being introduced.
As Richie puts it, buyers need to “just keep going” and, importantly, take the first step by finding out what is actually available to them.
For anyone currently renting and dreaming of buying, his advice is perhaps best summed up by one of his recent experiences: a man living next door to a property Richie was selling told him he would love to buy someday. Richie asked whether he had mortgage approval. He didn’t even know what that meant.
After being shown how to get started, the man contacted his bank, secured approval about a month later — and was then in a position to potentially buy the very house next door.
The lesson? Don’t assume you can’t afford to buy. Find out first.
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