Builder priced house too high says bank
Q I am a first-time buyer and got mortgage approval in principle six months ago for €130,000. I have a permanent, secure (public sector) job. I found a house, new-build (outside small midlands town) being sold by the builder, not a “zombie” estate, half the houses are lived in. The price from the builder is €120,000, well within my budget. These houses were originally over €200,000. I went sale agreed with the builder, but the bank sent out their valuer, who valued the house at €80,000 and the bank says it will only give me 92 per cent of that! Obviously I now can’t buy. Surely if I am willing to pay the €120,000 then I should be allowed to as I thought it’s the market that decides the price of things. Is there anything I can do?
A If you were paying cash then you could pay whatever you fancied for the house, but you’re not. And if you did that and bought at €120,000 then you would be in significant negative equity from day one as the house next door to yours would most likely sell for in the region of €80,000.
While you are planning to “buy” the reality is you will not actually own the house until the last mortgage payment is made – in 25, 30 years time.
Until then the bank owns a decreasing stake (equity) and it’s in their interest to make sure that that equity reflects the market value of the house.
What did the builder say about the valuation? If your lender is valuing the house at €80,000 then it’s highly likely that all other lenders will be there or thereabouts.
So he will have heard the same story from other potential buyers. Offer the €80,000, wait, continue saving hard.
Do I qualify for attic insulation grant?
Q A flier came in the door about attic insulation saying that a government grant would cover it. Are people who own private property eligible or is it only council housing? The insulation is poor in our attic – so it has to be done – but do I have to have the house assessed first?
A The basic rule is that if your house was built before 2006 then you can apply. The grants are fixed, so the grant for roof insulation is €250. You need grant approval before any work commences and there are certain restrictions.
For example, there are several additional energy saving grants you can apply for and there is a minimum requirement that the grant amount in the first application must be €500 or greater.
You don’t need to get your house assessed (get a BER assessment) before you do the work, although there is a grant of €200 to go towards a before- and after-works assessment. This cannot form part of the €500 amount. See sei.ie/grant.
As to the flier coming in the door, they may be completely reputable suppliers but you can only get a grant if the work is being completed by one of the Sustainable Energy Ireland registered suppliers – see sei.ie.
Your questions
Send your queries to Property questions, The Irish Times, The Irish Times Building, 24-28 Tara Street, Dublin 2 or email propertyquestions@irish-times.ie. This column is a readers’ service and is not intended to replace professional advice.
