During better times, it was easy to figure out how much to pay for a house. You paid whatever the bank would lend you, and you made sure they'd lend you as much as possible by using "off balance sheet" loans from credit unions or family to boost your deposit. You'd boast about earning more than you actually earned, you'd promise to rent a room. Anything that could be done to get more in debt would be done.

The logic, if you can call it that was that if you paid €300K for a home, and it went up by 10%, you "earned" €30K profit. However if you paid €400K for the same home and it went up 10%, you "earned" €40K profit. And who wouldn't want an extra €10K?

When comparing house purchases with your golden circle of friends, he who paid most was declared the winner - crazy times indeed !

Today it's a little more tricky. Even if you wanted to get seriously into debt, the banks are more reluctant to play ball. In any case fashion trends have changed. Paying the most is sooo 2006. Paying the least is this season's in thing. Everybody wants a bargain, and everybody is terrified of being the last great fool to join Ireland's property pyramid.

So, is there a way to know how much a house is actually worth? In a word, no. The problem is that no house is worth the same amount to everyone. There are various techniques that will tell you what the average person should be willing to pay, but that may be more or less than the house is worth to you.

The best approach is to listen to all the methods of putting a value on a property, and try them out. You may find that the various results start to congregate around a certain range. That in itself will be useful. You may also find that some techniques stress factors that are important to you e.g. if you feel you may need to rent the property at some point, then a valuation based on the potential rental return would be useful.

Come up with your own valuation method, or use an existing one, but do try to have some objective way of deciding how much to pay, and above all remember, this is real money you are spending.