My mam just sold her house for €220,000 and she is seeking to move back to Carlow, where our family are, as she is retired and wishes to be close to her family.
People keep telling her to wait six months to buy or to wait until “the market” dips. However, she has lost out on good opportunities by doing this in the past.
She is viewing houses currently and is wondering, should she wait? What would you do in her situation? And if she waits, for how long?
Mr J.N., Carlow
People are always generous with advice and, to be fair, for the most part they are very well-meaning. But, as the financial fallout from the last property crisis shows, gauging the “right time” to buy and sell is as much down to luck as judgment. There are an awful lot of people out there who invested in property in the Celtic Tiger years – both here and abroad – and now regret it deeply.
The other thing to note is why your mum is buying a house in the first place.
This is not an investment on which she is looking to maximise her profit; she is looking for a home. And, given that she is already retired, it is quite likely that this will be the final home she buys, so she will never benefit from any profit – or suffer from any loss – in its value anyway. It’s not something that should cause her a moment’s thought.
She has €220,000 and she should be looking to buy the property she thinks most suits her. As long as she can afford it, money, fortunately, is a side issue. What’s far more important is that it is convenient to the people and places she wants to be close to, that it feels right for her and that it is in good structural order.
A surveyor will confirm the state of any property she is eager to purchase. Apart from telling you that it is structurally sound, a good surveyor will generally give you a list of minor works that may need doing in the medium term and that is always handy.
As a pensioner, she is not likely to be borrowing, so she knows her price limit.
She could wait a month for a property she really loves to come down only to find that it has gone the other way and moved out of her reach financially. You say she has already lost out on some “good opportunities” in the past.
Yes, she could also pay for a home only to find that a neighbouring property goes for less a few months down the line, but who cares? She will have her home and be happy in it. The correct price is the price on the day – subject to any haggling she can do. This is not an investment balance but a home.
Trying to second-guess the market is a dangerous game and it is even trickier in these very unique times. Covid-19 has effectively frozen the market. Will prices go down, as many believe, when things resume – especially with so many people still likely to be on reduced wages – or will they go the other way entirely, pushed higher by the sudden release of pent-up demand?
I’m no expert on the Carlow housing market but the other thing to remember outside the cities is that property market dynamics can be different.
If I had to guess, I’d say, nationally, prices might come down, at least in the near term. but if I was looking for a home and had found the place I wanted to buy, I wouldn’t be playing chicken with the market – or running the risk of someone else coming in and taking the place I wanted from under my nose. I’d just go and buy it, and that’s what I reckon your mother should do too.
As it is, the money she has got for her old house is earning little or nothing anyway, given the interest available on bank savings these days.
And if she doesn’t find a place she likes? Well, then she can hold on to her money until she does. There’s no point spending good money for the sake of it only to be unhappy in your home. With legal, estate agent and surveyor fees, you’re paying for the privilege of buying anyway.
Please send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street, Dublin 2, or email dcoyle@irishtimes.com. This column is a reader service and is not intended to replace professional advice. No personal correspondence will be entered into.
